Everyone however, experiments. Whether it's a new theme or a new plugin, you really, really need someplace to test things. one of the worst thing you can do is what I do with this blog, just install things and play with them in production. [...] There is a solution though, actually, I'll present you with two. One for PHP developers who know what they are doing and want control, and one for regular bloggers who just want someplace to test plugins and themes before pushing them live. In both cases though, the services are free.
He gives a brief introduction to setting up and configuring each of the services - one that lets you import your own version and the other that lets you select to automagically setup a WordPress instance.