yep xamp is pretty good. it doesnt display the wordpress templates perfectly, but it does help out a bit for offline editing with colors and design features. Check out this post on local wordpress install. it's great http://geeksaresexy.blogspot.com/2006/06/installing-wordpress-locally-under.html
another alternative that I forgot to mention is editing themes in Dreamweaver. I personally didn't find this the easiest way, but I know of someone that prefers this way http://max.limpag.com/2006/06/07/how-to-edit-wordpress-design-using-dreamweaver/ that's a good guide for editing themes in DW