My first Arduino project was blinking an LED. Dennis decided his first project should be a remote controlled webcam! Check out the link for more information, including the source code.
Having received my first Arduino I had to come up with a good first microcontroller project. Something not too complicated but more than just a book example. I had just purchased a wireless webcam (Linksys WVC54GCA) and thought it would be cool if I could move it around on a pan & tilt mechanism. And how much cooler would it be to be able to control it over the internet?
In the Maker Shed: