Say I build some software around the Bitcoin system and I would like to try stuff without having to earn real BTC first, and without having to employ a lot of hashing power to grow the block chain.

As I understand it, the bitcoin clients connect to the network to get the authoritative block chain, so it seems I can't set up a toy network easily. Or can I? I would assume developers of the clients would need some way of testing their software.

While I am a software developer, and familiar with stuff like modifying source and rebuilding the client, the point of this exercise would be to run unaltered clients in a dummy environment.