Question: So we are venturing out into the world of SharePoint and it seems that I have to install SharePoint Server directly on each developer's box. Is this correct? I have SharePoint up and running on a separate sever so it seems redundant to have to install it on each box. Not to mention installing SharePoint on Windows 7 is a pain in the ars. I'm just trying to clarify how to correctly set the environment up. I've been using this link as a guide so far: <http://msdn.microsoft.com/en-us/library/ee554869(office.14).aspx> Any advice is greatly appreciated!

Answer: 
No you don't need to install sharepoint on every box, just VS and the SDK. You should have a separate dev instance for them to connect to, but that should be a real server not a win7 desktop. 

So you should have 

1 Server with sharepoint 2010

N Dev workstations that have VS2010 and the SDK installed.
We've used Microsfoft VPC and installed Server 2008 and Sharepoint on that. Then do dev either on your host PC or the VPC and deploy to the Sharepoint instance on your VPC to test your changes. This way developers are stepping all over each other in a Development environment.