I did come across an online rental service for OSX the other day, you basically pay to remote connect and you have your own virtual mac. Interesting but I have no idea how far you could take it, e.g.: getting software installed and USB connectivity. Other options are the Hackintosh route (build a PC to run OS

if you have the parts and patience.
The answer to your question is you've got to spend some money if you want to get into building for iOS I'm afraid.
You'll need a Mac, preferably capable of running Lion for future compatibility. Then you WILL need a device, an iTouch might be the cheapest option. You can't realistically test via simulation as it's slow, lacks proper multitouch and accelerometer etc and you won't know for sure how your game really performs. If you are developing for a real device you also need to sign up for an Apple Developer account which is $99 per year and this allows you to release your creations through the App Store too.
So there's some investment, but if you want to do it the rewards of getting your games on the device are magical. You also have as much chance as anyone of making some money back. We've been quite lucky to get started, our first game made enough to pay the costs and set up a Limited company (we are now officially Ovine by Design Limited

). My first MMF game is going through the last days of testing and will soon be released to the wild so fingers crossed. There's also plenty of success stories on the forums, so if making some money is your goal then go for it, but go in with your eyes open. Got to say MMF is the perfect tool to help you realise your iOS creations
Incidentally, many of us here run Windows alongside OSX via VMWare or Parallels (as mentioned above) which allows you to quickly create and build in MMF and get your game running on your iTouch, iPhone and iPad. More costs though.