The best practice would be for web developers to do their development on another machine (or in a different virtual host / directory on the same machine). When code is ready to be released, it's "published" from the test system to the live system. It would be a good idea to throw something like subversion into the mix for source code control. In this scenario, all users of your web developer group have read/write access to the test area, but only a few people have rights to write into the live system's web directory tree.
I guess virtual host will do the thing for me right now. Thanks for the idea.