I would suggest going with a PIC or AVR over an embedded linux processor, especially if you don't have any experience with them. If you have never used a PIC or AVR before (other than in the robot controller) I would suggest using an AVR. They have a more powerful instruction set, up to 20MIPS vs 10MIPS for most PICs, and all the software development tools are freely available (including C compilers). They also have extensive open source libraries. You can make your own programmer for under $10 by hacking a parallel cable or you can get the
AVRISP mkII programmer for $36 bucks. I have used both without too much trouble. If you don't want to mess with making PCBs, you can just buy a dev board, but I would recommend designing your own because it will give you a lot more flexibility.
-Ken