First things first! Before getting started with any software development project, you need to have certain basic necessities taken care of.

First - Version Control Software! The ability to keep track of changes made to code, and the ability to go back to any version is of utmost importance to any software engineering project.
Second - A wiki to track design and progress is also necessary. Helps make collaborating easy (of course, at the end of this project, my notes app will replace the wiki).

In my setup, I use Subversion & Mediawiki. Reasons? Just personal preference. Some of you may like to use git, or cvs. I chose Subversion because it comes pre-installed with MacOS, and also because I have prior experience using it for work. And I chose Mediawiki, because Wikipedia runs on it, and because its setup is plain & simple.

I will get into more details about how to setup a SVN Repository, and a mediawiki server in later posts. For now let me just leave with saying that these are absolute essentials.