Tools and Software needed to Code AJAX
You can develop AJAX based Application easy and quickly without the help of any third party tools and software's. For your convenience you can use Eclipse IDE, NetBeans etc. 
Myself i put some screen shots or images of Eclipse IDE to develop your own AJAX based Application. You can develop ajax application without using IDE but its not reliable because we need Tomcat Apache Server to run and verify our application.
Follow below steps to achieve a good end result for your AJAX Application.
For this i used a freeware software Eclipse IDE which is mainly used to develop JAVA, J2EE based Applications.
  1. Download Eclipse IDE from this Eclipse Official Website
  2. Open and install Eclipse if you need Java Runtime Environment( JRE and JDK) download from this site and install it. You can code your program without using JRE and JDK its not necessary for AJAX based application.
  3. Download Freeware Tomcat Apache Server now latest version 7.0 is available but i gave you the link for Apache Tomcat 6.0 Click the ZIP file and start download and install that with default password and username.
  4. Open Eclipse IDE and it prompts you to enter Workspace just give your application name.

Step By Step to develop AJAX program in Eclipse IDE(Integrated Development Environment):

STEP 1 : 
Open Eclipse IDE

STEP 2: 
Click File ==> New ==> Project (2)

Click WEB ==> Dynamic Project

STEP 4: 
Name Your Project and Click Finish

STEP 5 : 
Now you can see a Project Explore.
Click Server tab as i mentioned in red mark

STEP 6: 
Right click on the space provided in server tab Click New ==> Server

STEP 7: 
Now a window will open Click Apache ==> then select appropriate server which you installed as i mentioned above. Here i using Tomcat 6.0

In this step you going to select the Tomcat Apache Installed Path. I installed in my system in this path C:\Program Files\Apache Software Foundation\Tomcat 6.0

STEP 9 :  
Right Click in WebContent folder in Eclipse and then 
Click New ==> select JSP Name your JSP and click Finish

STEP 10 : 
Start Coding your Program as i Mentioned in coding section CLICK HERE .
After completed your Coding save your Project. Right click on the Tomcat Apache server which is at the bottom of the Eclipse and Click Start. After that Tomcat Apache Server will start running in Default 8080 port.

STEP 11: 
Open your Browser here i used IE(Internet Explorer 7.0) Just type url.
Example: http://localhost:8080/Ajax/sample.jsp
Note: http://localhost ----- is the local hostname
8080----> is port number. So its common no need to change any names in this type as i said http://localhost:8080/
After http://localhost:8080/ i mentioned Ajax is the Project Name which you give during the creation of project. sample.jsp is the name of your JSP page which you created.