It's certainly possible to develop on a Windows machine, in fact, my first application was exclusively developed on the old Dell Precision I had at the time :)
There are three routes;
- Install OSx86 (aka iATKOS / Kalyway) on a second partition/disk and dual boot.
- Run Mac OS X Server under VMWare (Mac OS X 10.7 (Lion) onwards, read the update below).
- Use Delphi XE4 and the macincloud service. This is a commercial toolset, but the component and lib support is growing.
The first route requires modifying (or using a pre-modified) image of Leopard that can be installed on a regular PC. This is not as hard as you would think, although your success/effort ratio will depend upon how closely the hardware in your PC matches that in Mac hardware - e.g. if you're running a Core 2 Duo on an Intel Motherboard, with an NVidia graphics card you are laughing. If you're running an AMD machine or something without SSE3 it gets a little more involved.
If you purchase (or already own) a version of Leopard then this is a gray area since the Leopard EULA states you may only run it on an "Apple Labeled" machine. As many point out if you stick an Apple sticker on your PC you're probably covered.
The second option is more costly. The EULA for the workstation version of Leopard prevents it from being run under emulation and as a result, there's no support in VMWare for this. Leopard server, however, CAN be run under emulation and can be used for desktop purposes. Leopard server and VMWare are expensive, however.
If you're interested in option 1) I would suggest starting at Insanelymac and reading the OSx86 sections.
I do think you should consider whether the time you will invest is going to be worth the money you will save though. It was for me because I enjoy tinkering with this type of stuff and I started during the early iPhone betas, months before their App Store became available.
Alternatively, you could pick up a low-spec Mac Mini from eBay. You don't need much horsepower to run the SDK and you can always sell it on later if you decide to stop development or buy a better Mac.
Update: You cannot create a Mac OS X Client virtual machine for OS X 10.6 and earlier. Apple does not allow these Client OSes to be virtualized. With Mac OS X 10.7 (Lion) onwards, Apple has changed its licensing agreement in regards to virtualization. Source: VMWare KnowledgeBase
You can split off the reusable code into small functions and classes, and put them in their own separate header and source files. This is a simple step that will greatly help you clean up your code.
Eventually you can put these files into a separate Xcode library project. This will enable you link with that project from different applications. However, this is somewhat advanced, and it looks that you are very new to all this so you may want to focus on the basics first.
You will be using Objective-C and Cocoa. These are fairly strange concepts to crasp if you have not done MAC programming before, but after a short while you will probably fall in love with them. The most important concept to remember with iPhone development is memory management as the device has no concept of garbage collection.
Not too long. There are a multitude of example applications on the internet, and many helpful folk on stackoverflow.com
You will need to download the SDK, create an app using xcode on the mac (or similar environment for windows if there is one) - you can test with simulator without giving apple anything, but in order to legitimately test on device you need to become an apple developer.
However If you jailbreak your device, you will be able to follow one of several methods to get your application on the iphone bypassing apples restrictions.