What we use
We strongly believe in and love open-source software. Confused? Maybe a quote from Uwe Thiem will help a bit understand the concept:
It's a kind of distributed cost model. You only pay for those features you specifically need. In return, you benefit from all those features others need and pay for.
Our team currently heavily uses Zen Cart, CakePHP, Ruby On Rails and two wonderful javascript libraries Prototype and jQuery. Ovalpixels is also a proud contributor to Pagebakery.
As far as hosting is concerned, we chose in favor of maximum reliability. The synonym for it is Rackspace with their Fanatical Support ™ promise. Choosing Rackspace means you never have to think about server issues the same way again.