You can sign up as an Apple developer for free. You can download XCode for free. However, to test your application on a real (iOS) device you will need to pay the developer fee.

You can obtain the Mac OS 'images' and virtual machines via various (less than legal) methods. Some have reasonable success getting them to work on a PC, while others fail. Honestly, for me, the whole point of Mac OS development was to avoid the PC/Windows BS to a certain extent (the 'frying pan/fire' situation notwithstanding).

A Mac Mini is a reasonable price, combined with the developer license ($99), it comes out a lot cheaper than the MSDN subscriptions. Perhaps not a fair comparison, but suffice to say, you are not paying an extortionate amount.

Personally, I find the $99 per year palatable: while it is understandable that some are on a limited budget, if you have an iPhone you are, by definition, not on a limited budget when you consider what you pay for the 'privilege'.

I suggest not getting hung up on the cost, and think of it as an incentive to get your moneys worth over the year, and will drive you to create great looking and useful apps.