Thanks to the open source organizations, there are hundreds of tool that are free and essential for any startup. Few of my favorite onces are

Sharing Documents with team
1. www.pbwiki.com
2. Wiki on hosting sites such as TiWiki etc
http://info.tikiwiki.org/tiki-index.php
3. http://docs.google.com
4. http://www.dokuwiki.org/dokuwiki

Blog
1. www.wordpress.com

PR -- Free and Paid (It's inevitable to have a good PR).
1. Good Tips - http://www.wikihow.com/Write-a-Press-Release
2. http://www.indiaprwire.com/ (Free)
3. http://www.prnewswire.com/
4. http://www.pr.com/promote-your-business
5. http://www.businesswireindia.com/
6. http://www.prlog.org/
7. http://www.free-press-release.com/submit/

Voice Conferencing
1. www.freeconferencecall.com (Free)

Remote desktop sharing for sales & customer support

- www.yugma.com (FREE desktop sharing tool)
-. www.vyew.com (great collaborative software and FREE)
-. www.logmein.com (For remote PC sharing - FREE!! Great tool for remote teams)
-. www.gotomeeting.com

Great communication chat tools
1. yahoo messenger (www.yahoo.com)
2. www.skype.com
3. www.msn.com
4. www.gtalk.com
5. www.aim.com

Sales Force Automation & CRM
1. www.sugarcrm.com (For initial support, download the opensource and install on the server
2. www.zoho.com (first 2-3 users are free)

Marketing and Branding
http://www.flickerbox.com/ (paid)

Customer Support
http://www.cerberusweb.com/download (free version)
1. http://www.kayako.com/
2. www.vtiger.com
3. helpcenterlive.com
4. osTicket

Group communication
1. Wiki is the best way (www.pbwiki.com)
2. Dokuwiki
3. Yahoo groups (www.yahoogroups.com)

Software & Application Life Cycle Management
artifactsoftware.com (ALM - Virtual S/w Development tool - FREE)

Email Clients:
http://www.google.com/a

Project Management
1. http://www.37signals.com/ (It's not free, but it has a free version to try).

Bug Tracking System:
http://www.mantisbt.org - PHP based
http://bugzilla.org

Test Case Manager:
www.teamst.org (Works well with Mantis) - PHP based
http://www.teamst.org/_tldoc/1.7/tl-bts-howto.pdf

Source Control Software:
http://subversion.tigris.org/
http://www.nongnu.org/cvs/

Networking - Key to any business
http://www.linkedln.com
http://linksv.com
2. www.facebook.com
3. www.myspace.com
4. www.orkut.com

Web Hosting
For reliable SaaS
1. www.rackspace.com (SAS 70 Type II Hosting - Important for SaaS based services)
1. a. https://www.mosso.com/buy.htm (Rack host company, but $100/MONTH)
2. Amazon Elastic Compute Cloud (Amazon EC2) (www.amazon.com)
For simple websites
2. http://bluehost.com
3. http://www.siteground.com/
4. http://www.hostican.com/
5. http://www.asmallorange.com

Information related to IRS (USA specific only)
http://www.irs.gov/publications/p463/

Payroll & HR outsourced service

http://www.trinet.com
http://www.adp.com (They have a SMB focus)
https://www.wellsfargo.com/
www.paychex.com

More information on type of company formed (US only)

http://www.legalzoom.com
http://www.corporate.com/entity-comparison.jsp

Tools for building websites
http://www.dnsstuff.com/
www.noip.com

Resource Centers (Useful links, books - directly from VCs)
http://neaiuv.com/resourcecenter.htm

Tools for SEO
www.seodigger.com
www.wordtracker.com

Accounting & Finance
http://quickbooks.intuit.com/ (For users in US, this is the ultimate software)

Legal:
Last but not the least, legal aspects are the most important for a web startup. Please find this interesting blog from Guy Kawasaki
http://blog.guykawasaki.com/2007/06/482413_for_lega.html