Arduino is an open source hardware micro-controller board. The open source idea is from open source software. I know of this Arduino board first introduced by a friend from open source group.
The Arduino (website arduino.cc) board came with a 8 bit RISC micro-controller chips with build in flash memory, an usb socket to transfer program and supply the power.
The Arduino came with a free software kit available on Windows, Linux and Mac OS X (Intel and PPC) platform. You can program the Arduino with C/C++ like language using this Arduino software kit.
The Arduino is popular because it is simple, cheap, open, and yet expandable. A pre-build Arduino board cost about 20-25 Euro (about RM100 to RM120, depends on exchange rate). You can program it easily with code similar with C/C++. There are some ready made expandable module available, which turn the Arduino into a robot controller, mini game console, LED display board and many other applications.
For the software part, to program the Arduino is easy, it has 2 functions:
The setup use to initialize setting, the loop function will repeat the job or action.
There is a good hardware and software introduction at youtube here.
An Arduino cheat sheet may be helpful, you can google for PDF version.