As recently as 18 months ago it seemed there wasn’t much to handle software product development except either bug databases, generic wikis and intranet platforms, or maybe expensive and (for my purposes) cumbersome enterprise software, which is not what I’m interested about.
Now that I’m looking again at this though (we need something to keep our growing team in synch at Soflow), there are at least three new applications meant to address the need for the right mix of structure and flexibility:

• Basecamp
• Rally (they raised $4.5M recently)
• Trac

Atlassian provides both issue tracking and collaboration but I’m looking for a single tool that seamlessly supports the whole product management and development process, from business case to user requirements to functional specs to tracking development progress, tests and debugging. Borland has CaliberRM but it needs its own server (the fact it comes both with a web and a desktop client is attractive though) and is not exactly cheap. But if I look in that direction there are plenty of requirement management tools.
Here are my notes so far:

• Basecamp and Rally are ASPs, which is quite attractive from my perspective.
• The team at Trac has planned to compare their software to Basecamp, but unfortunately they haven’t done so yet.
• Basecamp articulates its value very clearly but feels more like a generic project management tool than something finely tuned to software projects. The people behind Basecamp and Ruby on Rails use Trac, which should tell me something.
• Likewise Rally tells a good story about what it does for you. However, there’s nowhere I can find Rally’s pricing. That’s really a negative point for you guys to make my life as a prospect difficult.
• Trac, like most open source projects I’ve looked at, bombards you with technical information and is very lousy at explaining its features and benefits (OK, let’s rephrase that, they’re not even trying). I’m not shopping for plumbing here. On the other hand it will eventually incorporate alien technology, which you’ll admit is a very compelling roadmap.

As an aside, these three products, because of their use of common names, are badly named in terms of search engine findability (when I want to find what people say about them, not the official sites). Your comments and suggestions welcome (ignore the ‘error 500′, I’ll get the comments anyway).
From a company-wide perspective, I have this compelling vision of handling the product cycle on Rally, the sales and marketing cycle on Salesforce.com (or similar CRM ASP), and gluing the whole thing together in a common narrative on Jotspot. Instead of asking each member of the team to generate their own layer of reporting, which some will perceive as overhead, I’d like them to use online collaborative tools on a daily basis, whose one output happens to be reporting.
Speaking of online collaboration, we can’t get Skype to work without huge lags (3-4 seconds) and signal drops during 4-way conference calls. Vonage doesn’t let me initiate more than a 3-way conference call. Can anyone suggest something else or is VOIP calls with 4+ parties a pipe dream for technical reasons?
07/21/05 update: Looking for recruiting web app.
04/10/08 update: we’re a Salesforce, Trac and Basecamp shop these days. We love Salesforce, like Trac and barely tolerate Basecamp and its retarted writeboards. I’m looking for something that sucks less so that our team actually uses it. Clearspace maybe?
In the Trac-like space there’s an explosion of competitors lately: Assembla, Beanstalk, Code Spaces, Collaboa, Retrospectiva, Springloops, Unfuddle. Several of them are done by teams from Eastern Europe doing a good job at looking like 37signals clones.