Jim Schimpf has posted a HowTo on Embedded development with XCode using the Atmel AVR chip. I just talked to another engineer/software developer who says he loves these chips because they're (1) pretty powerful and have a multitude of options with serial, usb, parallel, ethernet, etc. ports, and (2) really cheap (~$10?).
Now looks like I can program them using XCode. excellent Of course, I wish XCode would stop sleeping on the job and work with CVS already! (yeah yeah, it says SCM, but have *you* gotten it to work?)