Food for thought. The Dragon was not meant to be a full development kit, it's an advanced programmer/emulator/debugger. Yes it comes as a nearly naked PCB, but this has the advantage that you can put any style headers on it that you want and customize it to taste.
The ATAVRISP works (I had two, I've given both of them away free to other users as I have an STK500 now) The thing is ALL the ATAVIRPS does is ISP programming, no other bells or whistles and can't do high voltage or serial programming (if you need it) and does not program 32 bit chips.
The Dragon supports every 8 and 32 bit AVR chip that Atmel makes, it supports JTAG programming, in circuit debugging high voltage serial and parallel programming. And it has an emulation interface for every AVR device that exists with 32kb of flash or less. It has mounting holes for standoffs and some prototyping area on the programmer itself, basically it is a tool designed to allow the user to customize it, it was never meant to be sold as a fully featured development environment and anyone that thinks this is a problem bought a Dragon without doing their research, and is kicking it for the wrong reasons.
So the AVRISP is okay, but the only thing you will ever be able to do with it is ICSP programming on the chips that support it. As stated if you set the fuses wrong on a chip and disable the programming mode that it requires you'll have bricked the chip without a more advanced programmer, that's why I got an STK500 (the Dragon wasn't out at the time)
I'm pretty sure you'll outgrow the AVRISP in relativly short time span, but it's a quick gun and run sollution to getting a programmer that works well now. If you continue with AVRs the Dragon will probably be a good investement.
One thing to keep in mind is that Atmel does no currently have ab uilt in C compiler, you have to use AVR GCC which interfaces well with AVRStudio.