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Once you're all set up, the first thing you want to do is enable Windows Developer mode. Head to the Settings app, then “Update & Security” and click “For developers” in the bar on the left. On this screen, choose “Developer Mode” then accept the warning that pops up.
A development environment is the collection of processes and tools that are used to develop the source code for a program or software product. This involves the entire environment that supports the process end to end, including development, staging and production servers.
Microsoft offers lots of express editions of Visual Studio and SQL Server that are free of charge and may even be used commercially. In programs like DreamSpark, students can download e.g. Visual Studio 2010 Professional (full edition!) for free, so it is not said that you need to pay hundreds of thousands to develop Windows applications.
Other IDEs like SharpDevelop are available for free, too, but they are not nearly as terrific as Visual Studio. However, even when using the express editions, one can be very productive.
The MSDN library is free of charge, too. I cannot say whether the Telerik controls justify their costs as I have never felt the need to use them.
The cost of the tools is tiny compared to what you spend on the developers themselves. For example, most of the tools you've mentioned are included in Visual Studio Professional with MSDN, which runs about $800/year.
The real question, then, is whether you get any benefit from that cost. That's harder to answer, and I suspect depends on your developers and what kind(s) of software you develop. As such, it's impossible to give a blanket answer. Nonetheless, from the employer's viewpoint there's hardly enough difference between the two to notice.
The cost might not be as high as you think (depending on a lot of factors). There is the BizSpark program, and there are also 'express' versions of Visual Studio, SQL Server, etc, available.
Taking Windows 7 cost a side, you can use Visual Studio Express, SQL Server Express to create your applications. Of course this version has less features than the "bigger" ones but has the compiler, IntelliSense and many other stuff that makes a solid option.
Since you mentioned Blend, I think you are interested working with WPF, I don't think the Mono alternative is completely mature.
I have been a full-time .NET/C# developer of desktop and web applications since 2002, and of the pricey items that you list, the only one that I have ever paid money for as a professional deveoper is Visual Studio.
The cost of a current version of Windows is virtually inseparable from the cost of a new PC. SQL Server Express is free and is absolutely sufficient for virtually all development-related database needs. Don't need or use Expression Blend. ViEmu? Not a chance I'd pay for something as awful as vi. I've been able to get by without every using anything from Telerik.
Buying a copy of Visual Studio is far from an extraordinary investment in tools when one considers the productivity gains.
Well it always depends on your projects specifics but to the extent that it doesn't no, probably not for a web app. There's plenty of people out there who can code HTML/CSS, Javascript, SQL and at least one of PHP, Python or Perl so devs should be reasonably abundant. There's a whole bunch of frameworks, libraries and free code for each and you can use them all in any combination you like for no dollars down, no dollars per month.
As far as IDEs go if you're considering hiring web and web app developers who are uncomfortable working outside an IDE you're probably looking in the wrong place for developers. If you can't live without an IDE then Eclipse is OK assuming you have some pretty well specced dev boxen but I have to say the best code ninjas I've encountered all use either emacs or vim!
Also it's nice to code on a system with unlimited virtual desktops and a proper command line. Having said that I hear MS have made some progress with these in the last couple of versions so they may be more aligned now. I'd be loath to start coding a big project on Windows without making sure there were good builds or equivalents of tail, grep, systemtap/dtrace etc available though.
Funnily enough though the last web app I had to do was mostly in Windows as it was Flash based. The flash IDE was pure pain but thankfully most of the donkeywork was in the classes so I got to use the lovely Notepad++ for the bulk of that, anyway that's not really relevant to our discussion on the worth of the MS toolchain so I'll move along!...
Top tip if you're developing on Windows after working on Linux make sure to install Kat-Mouse and an "Always-on-top" program like deskpins or you may quickly end up defenestrating your dev machine!
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