I really want to learn how to use the nerdkits and a ps/2 keyboard to control a large lcd monitor (HDMI ready or similar). Is this possible with the microcontroller or do I need a microprocessor.

This question came to me when I wanted to have more than 4 lines of display.

Where do I start?

I know you can drive composite video out with an AVR Microcontroller as demonstrated in the TellyMate board. You can also get them at SparkFun. This little board or shield takes a serial input and displays text or text based graphics on a TV.

Now that setup uses an ATMega8 but I wouldn't be surprised if it couldn't be re-done for a 168. However, you coud just get one and use it as a serial display output.

Rick