I've been looking into various microcontrollers as a hobby, and am now going to just sit down and do an albeit informal workshop at Bazcamp on microcontrollers. I've settled with the ATMega128 for several reason. First, I started reading the Beginning Embedded Electronics tutorials from SparkFun as a starting point, and that tutorial used ATMega8's which apparently aren't available anymore, so the kit they sell now has a ATMega128, which is essentially the same. I picked up a few kits and some extra micros.
About halfway through building the first prototype programmer on my breadboard, I started realizing a pattern on Make. There were quite a lot of projects using the Arduino kit. So I bought a few (from Sparkfun...they're one of three resellers in the U.S.). The nice thing about Sparkfun is that they are in Boulder, so their Fedex Ground shipping takes the same time as the overnight shipping.
So the Arduino came, and I started playing with it. It's also got an ATMega 128 on it, but it's got some extra stuff. It's great for prototyping, and it's quite fun. One thing to keep in mind is that the Arduino can be built for $10-$15 dollars with parts from your local Radio Shack (I'll post schematics for it). The basic kits I bought from Sparkfun use parallel as the system interface, and so the USB on the Arduino is nice. I also like the headers that the Arduino board pins out, so you don't have to count pins out to figure out what is where.
I can see the Arduino serving two purposes for me. The first is educational purposes. My Basic STAMP was my intro to micros in general, so I didn't really need that. However, I can definitely see it replacing the STAMP as every tech's "first" in the future. The second is for quick prototyping for implementation on a more static protoboard or PCB later on. Other than that, it's just a toy...but a fun one!