The Galileo IDE framework (post Delphi 7) is Win32 but takes advantage of .NET framework services thus you have to have at least .NET 2.0 or higher installed. It and C++ Builder generates x86 binaries for Win32. And yes Delphi is made in Delphi. During one of the CodeRage sessions they where showing how they debug Delphi and was using the developer version to compile and debug the current shipping version at the time. It was wicked to see Delphi inside Delphi and being debugged.

See 10 Top Things Added to Delphi Since Delphi 7 for more info.