Prototyping is the pivotal activity that structures innovation, collaboration, and creativity in design. Prototypes embody design hypotheses and enable designers to test them. Framing design as a thinking-by-doing activity foregrounds iteration as a central concern. This paper presents d.tools, a toolkit that embodies an iterative-design-centered approach to prototyping information appliances. This work offers contributions in three areas. First, d.tools introduces a statechart-based visual design tool that provides a low threshold for early-stage prototyping, extensible through code for higher-fidelity prototypes. Second, our researchintroduces three important types of hardware extensibility — at the hardware-to-PC interface, the intra-hardware communication level, and the circuit level. Third, d.tools integrates design, test, and analysis of information appliances. We have evaluated d.tools through three studies: a laboratory study with thirteen participants; rebuilding prototypes of existing and emerging devices; and by observing seven student teams who built prototypes with d.tools.