For me, virtually everything I've been involved with personally was developed for something I was doing. POP Forums has been that way from the start, as is my forthcoming ad server, CliqueSite.Ads. The only real negative is that sometimes I'm not as open to the feedback of other users, because it generally works just how I want it to work. :)
I think that building something that will be used by developers, like an IDE or an open-source Web package or whatever, opens you to more scrutiny than you might otherwise get from consumer shrink-wrapped stuff. It's a tough audience. All the more reason to spend time with the product you want others to use.
I'm starting to get excited about VS 2005 again. It's exciting to see beta 2 just weeks away, and I have to say that Team System offers a lot to be excited about. I might have to get an MSDN subscription again (unless someone knows who to talk to get authors hooked up).