Which IDE if any, are people using to develop Ironruby in?
Visual Studio?
According to the IronRuby website Visual Studio C# Express can be used (and in turn, any commercial version of Visual Studio 2005+ I'll assume).
From the IronyRuby.net home page:
Today, you must check the source code out of the IronRuby Subversion repository on Rubyforge. You will need a Subversion client: we recommend TortoiseSVN. To build the sources from the command line, you must also have Ruby installed on your computer already: we recommend the Ruby one-click installer. You can also build the sources using Visual Studio; if you don't already own a copy, you can download a free copy of Visual C# Express 2008.