We did dead reckoning last year, and as much as I advise against it, it IS the easiest (and typically fastest moving) way to go...
We had to run actual simulations
As in, we test it with the robot and if it goes psycho we have to jump on top of it and cut the power. I'm sure there are more effective methods of testing it, but to be sure that it will work in the real world I would suggest your main testing tool be a piece of a field (you just need a space that's marked off with tape to signify field structures) and your robot.
(Side note: They DID give us the code for the IR beacon/sensors this year so I would really advise you take advantage of what's there...)
[Edit: The program he's referring to was RoboEmu by Rob Bayer. It ran PBASIC code, but I'm not sure he'll be making one for the C controller this year...]