for the local server, I use XAMPP -
http://www.apachefriends.org/en/xampp.html, and WP actually has instructions on how to install into it -
http://www.tamba2.org.uk/wordpress/xampp/
that way you can play around with the css and whatnot, preview it and everything, before you upload it to your remote server. It's saved my butt a few times
I'm not really good with php yet, so I'm not really using as much functionality as I can with WP. I hard coded my category links, and the right sidebar is a mix of php and hardcoded. It's not perfect because I get that damned empty outline running along the bottom right side. (I have to keep screwing with my css I guess) The important thing to me was the ability to post, and some of the plugins are useful. I've seen some (small) good results from it, so hopefully if I keep updating regularly it'll help.
I hate the sidebar widgets, I never can seem to get them working right lol.
(oh and btw, blinklist is already floating around out there, just not for what we're doing, and I think Preacher is the first one I remember to integrate blog posts into a LL, so I'm not that original hehe
)