I have used IETester in the past for testing in older versions of IE, however I've recently come across Utilu IE Collection and Utilu Firefox Collection. However, I'm not certain of the reliability of the outputs I receive from these tools. Is it best to simply keep VMs installed with these browsers or are these tools good enough?
The only sure way is to use virtual machines.
Things like IE tester emulate older versions of IE, but they a locked into using the current set of DLL's loaded into windows. You will see errors in the native version of the browser that you do not see in IETester (and things like it).
I know this to be a fact because I have previously used IE tester to validate software that failed using a copy if IE6 in a virtual machine, and on a real install of IE6 (and I was left with egg on my face).