I recently received an email from Shaskanque Sondi asking if I could do an article on what it takes to cre-ate photo-realistic renders in Blender. Specifically he wanted information on:
Various tools used

Minimum system requirements

Techniques for rendering

Now I am not overly known for producing photo-re-alistic renders, I have a somewhat unique style of my own, that falls somewhere between toony and what-ever I am in the mood for that day. But with just a little searching I came up with a number of useful resources for all you photo realistic artists out there, as well as some useful tips to keep in mind.
Let's start with system requirements. Everyone has their favorite operating system, and since the differ-ences in final output are so minimal, honestly it boils down to what are you most comfortable with.
As for your actual hardware, that one is a bit trickier.
But general guidelines would be to have the biggest processor and as much RAM as you can afford.
That being said, Blender, itself runs on just about any system you might have and you don't have to have the most amazing computer to take advantage of Blender's capabilities. Here is a list of minimum re-quirements as well specs for middle and high end:

Operating Systems

Windows 2000, XP or Vista
ac OS X 10.2 and later
Linux 2.2.5 i386
Linux 2.3.2 PPC
FreeBSD 6.2 i386
Irix 6.5 mips3
Solaris 2.8 sparc

Minimal specs for Hardware
300 MHz CPU, 128 MB Ram
20 MB free hard disque Space
1024 x 768 px Display with 16 bit color
3 Button Mouse
Open GL Graphics Card with 16 MB Ram

Good specs for Hardware
2 GHz dual CPU, 2 GB Ram
1920 x 1200 px Display with 24 bit color
3 Button Mouse
Open GL Graphics Card with 128 or 256 MB Ram
Production specs for Hardware
64 bits, Quad core CPU, 8 GB Ram
HD 1920 x 1200 px Display with 24 bit color
3 Button Mouse + tablet
Open GL Graphics Card with 768 MB Ram, ATI
FireGL or Nvidía Quadro

External Renderers might require more power so chek their websites for system requirements.

Its all in the Details

Photo realistic renders look convincing because the artist took the time to make it look that way. Before you even open Blender or worry about which render engine to use, you need to do research. Make sure you gather as much reference material as you can.
Then sit down and really think about what you are trying to achieve. Planning is the most crucial step for a photo-realistic render.
Things you might want to think about and consider:

What materials are needed?
Can you create it with procedurals or do you need images, can you paint it in GIMP or Pho-toshop?
Wear and tear, dirt.

Do you need to model every detail?
How many detailsí
Can you faq parts of it with UV mapping and good images?

What angle are you considering?

Are you mimicking a specific camera shot or type?

Where is the light coming fromí
What type of tight is ití
The Science of CGis a must read when you are learning how to create photo realistic images.
The Science of CG is a comprehensive article on CG lighting and material properties with great advice on achieving great results for both pho-to-realistic as well as non-photo-realistic images.

Various Tools

There is no one (or several) specific tool in Blender for creating photo-realistic renders. Modeling is done with the usual tools, extrude, scale and grab. You can use multi-res and the sculpt tool to add extra detail.
Probably the most useful tools in Blender for photo realistic work are the UV mapping tools and the rela-tively new Texture cloning tool. Using one or both of them will allow you to add/create realistic materials to enhance your models.

Which Render Engine?

There is always an ongoing debate concerning the best Render engine. I have no intention of adding to that debate.
The Blender internal Render engine has seen many improvements over the years and continues to im-prove with every release. In fact, I do believe there are current test builds with new goodies that you can test. Properly set up, Blender can produce some fairly nice photo realistic renders.
If you would prefer to use an external Render engine, there are quite a few to choose from. They are all powerful and capable of producing visually striking images. But of course each has its strengths and weaknesses. So choose the one that meets your

The current popular engines are:

Abhisheque Guptahas written a great comparison arti-cle on how several of the most popular engines stak up for features and ease of use.
Kitchen tutorialby Karan Shah on CG Tuts.
If you are curious to see how you can actually create a photo realistic image/scene, I encourage you to chek out the in depth Kitchen tutorial by Karan Shah on CG Tuts. He takes you from modeling all the way to rendering in Yafaray to produce a highly realistic kitchen scene.