We have a lot of information on the internet out there on plenty of engines, SDKs, fancy IDEs, etc. But how did people manage to develop games in the past? Are there 'famous' tools? What was the most used programming language? how were they deployed into cartridges?
On both 8-bit and 16-bit platforms I'd generally use a combination of a macro-assembler to compile my code (always assembly!), and some kind of monitor cartidge to debug it.
Those cartridges were awesome development tools.
For the first game I wrote (on the c64), I first wrote my own macro-assembler using the monitor cart. I had smooth 60hz scrolling in the text editor(!)
On the Amiga the assembler of choice for me was DevPac.
The more professional folks (who had money!) had cross-development set-ups where you'd hook the target machine up to a PC and use that to dump code across to it.
For graphics I started off drawing stuff on graph paper, and later wrote my own character and sprite editors. Obviously on Amiga it was DPaint all the way.
As for the famous tools question, DPaint (aka Deluxe Paint) fits the bill on the art side.
If you have an iDevice, take a look at the apps "2600 Magic" (1Up article discussing it) and "Dragster Magic", both by David Crane. They are a fun peek into Atari 2600 programming.
3 words: Serial Port Debugger. I feel unclean even thinking about it.
Edge ran a story on how Gauntlet was made. All the art was drawn on graph paper and manually programmed in!
With great difficulty...