iPhone Development on Hackintosh

It's possible. But you are restricted to the choice of hardware for the hackintosh. Even if you get it right, no one can guarantee everything will work (sound, lan, etc.). If you can run the OS, you can run xcode with the SDK. But I don't think you'll be 100% satisfied with the end result.

As I see it if you want to run os x it's better to invest in a mac mini than in hardware for a hackintosh. Asuming you'll be buying all the components for the hackintosh.

Yes, you can, but save yourself some time and pain.

Pick up a Mac mini or an iMac.

Yes, it's totally possible. I developed my first app on a Dell running the iATKOS OSX patch.

Whether it's worth it or not really comes down to how difficult it is to get a hackintosh install (Kalyway / iATKOS) running on your PC. With some PCs it's trivial and everything works. For others it's a nightmare and your networking/audio/graphics will never work completely. If you need to run a patched kernel (e.g. you don't have an Intel Core 2 Duo chipset) things become really awkward.

Your best bet is to take a note of the hardware in your PC and do some research on the various OSX86 forums.

Assuming you get everything working the only future concern is software updates. iPhone SDKs generally require the very latest OSX update (e.g. 10.5.6), but installing updates on hackintoshes with patched kernels is a nightmare.

If you enjoy tinkering with this type of thing and are comfortable partitioning your HDD and playing with boot flags then I'd say go for it. If not, consider picking up a used Mac-Mini on eBay/craigslist or something. If you find out that iPhone development really isn't for you then you can resell it lose practically nothing.