The DBA's workstation would be running Win2k Server, (necessary to run SQL Server Standard?), with full SQL server standard installed.
Yes. I know there isn't supposed to be any difference between SQL Standard and SQL Desktop, but running the real thing would eliminate the chances of any finger-pointing later ("Well, it works on
my machine!"

.
We use the terminal services clients for administrative purposes too -- when you're installing new COM+ components, you have to copy them to the server (simple network file access), but you have to register them through the Component Services console, which requires you either walk over to the box (annoying), or use terminal services to run it from your desktop. This isn't related to SQL Server directly, but more of a general practice. You can do almost everything you need via Enterprise Manager and Query Manager, anyway.
A big part of development management is configuration control. A couple of companies ago I worked with a fellow who got ahold of the MSDN Universal CDs. He proceeded to install everything that looked interesting to him. When his code check-ins failed to compile, he said "Well, you guys just need to upgrade!". I about killed him, as we were targeting a certain configuration on the user's machine, and he just blew it out of the water. We lost 1-2 weeks on his "upgrades".
Speaking of source code control: if you're using Visual Source Safe for version control, part of your time will be spent fixing corruption issues in it (our engineer spends about a 4 hours a week on it alone). I wish I could recommend a better product, but all the alternatives (PVCS (and variants), Perforce, Code Co-Op, Continuus (now Telelogic CM)) are either too expensive, or clunky to use. For now, VSS is the best available (until something better comes along).
Chip H.