Arduino is a computer hardware and software manufacturer and user community that designs and manufactures kits for building interactive objects that can interact with the physical world. The company mainly produces undersized and inexpensive single-board computers, perfect for hobbyist projects where a small, programmable computer is required. They utilize either 8-bit or 32-bit processors and use flash memory and EEPROM for program and data storage.
Arduino computing hardware (such as the Duemilanove shown above) is used in many projects. For example, Arduino's have been attached to balloons to take photographs of our planet from high altitudes and transmit those images back to Earth over a wireless or satellite connection.