What Drupal development environments are available besides XAMPP? I am using XAMPP for almost 2 years. Recently i found some articles that suggests that XAMPP is loading some extra libraries/dlls which is not required for a Drupal development environment. 
Is there any other options that i can adopt for Drupal development besides XAMPP?

I found nginx.
I think it's best if your local development environment matches the environment of the servers your site(s) are actually hosted on as much as possible.  I've used XAMPP with Drupal and I haven't ever had problems relating to extra libraries being loaded.

That said, if you're looking for a Drupal-optimized solution, Acquia, the company run by the founder of Drupal, provides a Dev Desktop which allows you to set up and host Drupal quickly on Windows or OS X.  This works similarly to XAMPP but it's easier to set up.  (Warning: Acquia's Drupal distribution is slightly different than the standard Drupal from drupal.org.  However, you can easily replace the Acquia Drupal distribution with the one from drupal.org if you want.)

For a different approach, you can try Drupal Quickstart, which is a Virtualbox VM that includes an install of Ubuntu Linux pre-configured with (as per the project page):


  
  Support for Drupal 7 and Drupal 6
  Ubuntu Linux, Apache, MySQL, APC, XDebug, IMAP, UploadProgress
  Firefox (with developer plugins) and Chrome
  Drush, drush make, and custom drush commands
  Install scripts for: Apache Solr, Aegir, Hudson, and Oracle
  Netbeans and Eclipse, configured with XDebug
  XHProf and Webgrind profilers. Emails logged as files
  cvs, subversion, git, bazaar
  


This is the "whole development environment in a box" solution.