I assume Eclipse is still a “requirement” for development? I only use IntelliJ, but I would like to start looking at contributing to OpenHAB.

Is Eclipse used just for OpenHAB and binding development? Or is it needed for writing rules as well?

Well, given that OH 2 is built upon the Eclipse SmartHome project and OH 1.x literally is Eclipse, I wouldn’t be surprised if using Eclipse for development of bindings or contributing to the core is a near requirement. Though I would not be surprised at all if one could, with enough effort, make it work in InetlliJ or NetBeans or some other Java IDE of choice. It is all built with Maven so maybe it isn’t all that much work at all.

Designer is also built upon Eclipse. However, one is not required to use any particular editor for Rules (or any other config file). Some use vi, Notepad, Notepad++, EMACS, etc. At this time though the only IDE that understands all the configuration files and the Rules Domain Specific Language and can do IDE like things like detecting errors as you type, “intellisence”, understand and apply stuff entered in your Items files to your sitemap and rules files (e.g. detect typos in Item names) is Designer. And given the sometimes arcane and unhelpful errors that get generated by Rules, I highly recommend using Designer because sometimes a typo that is easily caught by Designer can take hours to figure out based only on the errors generated in the logs.

That being said, Designer has been customized and simplified down to such an extent that it really is a special purpose built tool with very little resemblance to generic Eclipse. In other words, you will not be using Designer to develop any Java code. It is truly just an OH IDE. So unless you have an allergy to Eclipse for some reason (in which case OH might not be for you since a huge portion of it comes from the Eclipse Foundation) I wouldn’t look at Designer as using Eclipse. The two experiences are simply too far apart.