I am really only playing around with this stuff, but from what I gathered, the software used is mostly DAZ3D to create the models and Renpy for the scripting. Some use Blender or port the models to Blender. I've installed DAZ3D and it is quite easy to put some models down and get them to take a pose and then render it. If you want to learn more about it, search on Youtube for IT Roy - he has several good videos on this (that I'm reviewing as well :-)