hi, hero its a type of microcontroller, i'm sure you know of other brands/models , but for those that dont know:
an arduino is a little external micro controller, you connect it up to your pc via usb , i use a program called Max msp to control it ( max msp is like a virtual bread board , but sooo much easier than electronics); and from this program i can trigger the Arduino to send out 5v or i can receive a signal too. (the little arduino has 12 digital in or outs and 6 analog ins or outs, from what i can see so far)
so it is a little in/out device ( costs about £27). one example i can trigger relays from my computer...or maxmsp can sense switches , its a way of conecting real world bread boards to the virtual bread boards.
you can also link up max msp to sequencers ( cusbase ,logic).
I found these real world bread board projects very complicated in comparison to the virtual stuff on maxmsp.
but to make something work on a real breadboard is much more rewarding. : )