Isn't it great to live in the future?
Really you could say that paying $20/board to break out a $2 chip was the insane bit (of course, if it makes the difference between you tinkering and not tinkering, totally worth it). It certainly hasn't been the cost of making arduinos that's been holding back your 'amazingly disruptive disposable electronics' - no chinese factory will have been paying more than a few cents in total parts costs for their mass-produced widgets of this sort for years now.
If you want garage-tinkering-friendly microcontrollers, can I tempt you with the newish NXP LPC810 [1]? It has a 32-bit core which can run at 30MHz (as compared to the 8-bit core running at about 16MHz on the arduino, iirc), and they're $1.37 in single units, less than 60 cents if you want 1000. ARM maintain a whole GNU toolchain [2] to develop on them - it couldn't be easier.
[1] http://www.digikey.com/product-detail/en/LPC810M021FN8FP/568...
The LPC810 is neat, but very limited in flash memory and I/O. Check out the NXP LPC1114FN28--it's a 28 pin breadboard friendly DIP package ARM cortex M0: http://www.nxp.com/products/microcontrollers/cortex_m0_m0/lp... 32k of flash and a similar amount of I/O as the ATmega328P used in an Arduino. The big advantage of ARM is that you can use free in circuit debugging tools like OpenOCD to debug and step through code in real time on the chip. It's not easy to do that on an Arduino without a $50+ adapter.
I like & use the LPC Expresso stuff too, but you can do a lot with an Arduino.
Now if you want it to do something you can see other than in the logs from within the IDE, that's when you start needing more stuff. Generally a breadboard, wires, and some components like leds and resistors come next; for making blinking lights, who doesn't like those?
As far as the computer, it can be best answered here but is just about anything you have: http://arduino.cc/en/Guide/HomePage in the getting started section.
Also, check out for local hackerspacers, as there will definitely be people that to set you on the right path.
Q: Can I use an Arduino board without the Arduino software?
A: Sure. It's just an AVR development board, you can use straight AVR C or
C++ (with avr-gcc and avrdude or AVR Studio) to program it.
From: http://arduino.cc/en/Main/FAQ
As a side note, if you are feeling fancy, you can build your own firmware based
on LUFA and load them into the Atmega chip the boards have as an USB-to-serial
converter. That opens a world for pretty cool hacks too.[1] http://www.nongnu.org/avrdude/ [2] http://learn.adafruit.com/arduino-tips-tricks-and-techniques...
But you need to use their (terrible) IDE for writing your sketches this way.
You can also use avr dude; there's a sample makefile available here: http://playground.arduino.cc/Learning/CommandLine#.UzQ_ca1kF...
How exactly are the devices like the Pro and Mini programmed? I've never been able to get a straight answer.
You then either solder on some headers and connect it to the breakout, program it, and then disconnect it when done or do some funky alligator clip madness to connect the breakout to the arduino.
Note that the pro already has the pins waiting for the breakout to be connected.