Pivotal has been using and improving agile development methodologies since the very beginning. The particular flavor of agile process Pivotal favors is called Extreme Programming, or XP. It combines Test-Driven Development, Pair Programming, short iterations, and Continuous Integration, to radically improve software quality and flexibility while reducing time to market and cost.
When we build applications, we start by writing tests for every feature we implement. Only after the tests are in place do we write the code that implements those requirements. The rhythm of writing a failing test, and then making it pass by implementing the feature, ensures complete test coverage, and a more reliable product.
When we check in our code, a Continuous Integration server checks the code out again, and runs all the tests, to make sure that the code will work correctly in production. When the build breaks (i.e. when tests fail in the Continuous Integration environment) the focus of the team shifts to fixing the build, ensuring that defects don't creep into the code base. We continually deploy new features to our demo environment, so that the customer can see the new features in a realistic setting, and immediately begin play-testing them to make sure they're what was intended, and that the actual behavior is desirable.
We keep our development cycle to one week iterations. This keeps features from drifting out of control, and gives quick feedback on each new feature being developed.