A colleague and I were discussing desktop systems, and agreed in confusion about the seemingly typical cost-cutting measure of giving developers underpowered systems to work on.  This got me thinking:

First of all, with todays prices, how expensive would it be to really outfit a developer with a truely powerful rig?  You don't need tons of storage or a fancy 3D gaming card or high-end sound (unless, of course, that is your line of business) so you should be able to get a really powerful machine for under $2000.  It shouldn't be hard to do an ROI for that, just in productivity gains.

Second, it would make your true developers, the propeller-heads that love this stuff, very happy.  That is also a great productivity gain.  After all, a happy coder is a working coder, not one that is standing around bitching.

Finally, I always felt it a truism that it is worse to have a better system at home for development than at work.  This is more an intangible.  After all, you can't constantly be polling people about their personal systems; not to mention, most of us have more than one.  I have 4 functioning and a few not.  I personally will feel more compelled to work on the better system; for management's sake it ought to be on my desk at work.  

So, you management types:  we developers love the hardware, we want to play with it, we want to use it, we want to possess it.  It's a cheap win to give us toys to play with.  We will want to exercise them.  It's in your best interest.