welcome to the forum.
To store the configuration the standaloneIdomain/host xml files will be problematic as the server write the the files during runtime and it might be problematic to keep it in sync.
I would recommend to use the CLI scripting to adapt the configuration, this will be also check whether a new version can run with that config.
You might have a look to the ejb-multi-server quickstart, where you find an example how to configure with CLI.
I don't see a problem run the dev machines with a domain, it will be easy to handle.
On the other hand you have to deploy the app with CLI (or http management), I'm not familiar with the Eclipse plugin, but I suppose the JBoss tools provide such
I partly agree with Wolf on this one.
I think I would stick to standalone mode for dev environment. As to keeping the server configurations in sync and version controlling them, I would follow the management operations approach. AS7 can be fully configured via management operations. These management operations can be executed in various different ways. CLI (command line interface) is one such approach. The CLI allows you to run pre-built "scripts" which have the management operations to configure a server.
So typically, you would come up with the necessary management operations to configure you server and then store them as CLI scripts and version control them via SVN, Git or whichever version control system you use. Each dev can then just install a clean AS7, then checkout these scripts and run them via CLI to get your custom configured AS7 instance.
Except for a minor change to the command, the domain configurations can then use the same CLI scripts. The domain mode operations require you to specify the profile you want to run those operations against.