I've been asked to share the tools I use for malware analysis, in particular API details.
The Malcode Analysis Software Tools from iDefense Labs are extremely useful. toolsmith featured the suite in the July 2007 column.
API-Logger can be used as a standalone tool or you can run the .exe through SysAnalyzer which includes API-Logger output.
Other important pieces in my sandbox included VMWare Server (Linux host, Windows VMs), PE Explorer, RAPIER 3.2, Wireshark, Mandiant Red Curtain (MRC), and the Systinternals tools.
Check the toolsmith page for articles on Wireshark, MRC, and RAPIER use as well.
Required reading from the "The Godfather of RE", Lenny Zeltser, includes his Reverse Engineering Malware paper.