http://www.instructables.com/id/The-RRRRRRRRRRBA-or-What-They-Dont-Teach-You-in-/). You could make a portable video game that could fit in a small candy tin, not including the monitor or hand controls. Did I say monitor? you can even hook up the Arduino to a monitor and or a tv (via an rf modulator). Like from the really old computer days. Hope you did not get rid of that old equipment when the media wanted you to. They are still good to go! There even has been developed a simple basic interpreter, so you can even write your old programs reminiscent of the old Vic 20 days.
Tv/monitor Connections will vary depending on the software you use, but the parts are generally the same. There are a zillion projects all over the net to work from. www.instructables.com has it's own wealthy list. Can not wait to make a pong game. Linux starter instructable: (http://www.instructables.com/id/Ubuntu-and-the-arduino/) . Have already done a prototype of a minimal security system (http://www.instructables.com/id/Arduino-simple-security-idea/)
There are lots of add on boards (known as shields), even for use with ethernet. Almost forgot, there is "free" software that you can download most computers to allow you to program in their own "C" for the Arduino easily. (http://arduino.cc/hu/Main/Software)( It is not, what can you do with it. It is what can you not do with it. Have fun.