See if this playground article is what you're after:

http://www.arduino.cc/playground/Main/RegulatedPositiveVoltageBooster

I've run into a few places where a line of code seems to stop everything working after it.  In my case I had some stuff physically hooked up wrong, and at that certain line of code, I was shorting something out and the board was auto-resetting to save itself.  See if the power light flickers at all, and maybe double check connections.  You could put some other known code above the suspect line and see if that executes.  It might be not enough power as you suggest, if you're using a Duemilanove it shuts down if you pull too much power I think.

After some more digging, I also found this great thread:

http://www.arduino.cc/cgi-bin/yabb2/YaBB.pl?num=1223295094/all

I've gone an ordered the Arduino Pro mini 3v3 version.  So when it gets in I'll post with powering results.

I'm going to start a simple blinky LED project that will be embedded in a hat.  All my current Arduino stuff is the larger 5v system.  However I can't seem to find any common small batteries that give 6-7v, and a 9v is going to be way to big.  All the small coin batteries are ~3v.  

So I think my decision is, stack 2 coin batteries, or get the 3v3 version of the Arduino Pro Mini.  All I'm going to be doing is fading 9 or 10 on and off LEDs, so I'm guessing the 3v3 version should do just fine.  I'm assuming the PWM pins and everything works similar on the 3v3 even at 8MHz.

Any thoughts on which direction to go?

When the Arduino powers back on, how can you tell if there is a previous value stored or not?  The very first time you run this, I'd want to setup a default value, and store that.  How can you tell if you're running the first time, or if you can pull an old value out of memory?

Instead of using the hardware serial port on pins 0 and 1, use the software serial library and connect the LCD to some different pins.

http://arduino.cc/en/Reference/SoftwareSerial

Have you thought about getting one of those swing arm lighted magnifying glass?  Not nearly as much fun as building something like this... but might do a decent job at solving the problem.  Plus as was asked, what about other stove functions like setting etc.

http://www.forlights.com/Lighting/Magnifier-Lights

I just got a package of IR emitter/detector from Radio Shack recently.  In that case the clear one was the receiver, and the tinted one was the transmitter.

There's a great playground page that gives you a basic IR decoder.  Might just need to test both of them.

http://www.arduino.cc/playground/Code/InfraredReceivers

Right, I was going to ask if there's any sane way to figure out which port is which.  Just plug 1 in and see what it gets called, then plug in the next and see what that one is called?  Will the ports change if you plug in the boards in a different order?

Maybe something like this:

http://www.sparkfun.com/commerce/product_info.php?products_id=8680


I think you would just use this on an analog input though. not one of the PMW inputs

Does it happen only when the Arduino is plugged in, or even if it is unplugged?  It seems to me the virtual serial port only exists when the Arduino is actually connected.  Worst case is to try and uninstall the FTDI driver (delete it from /System/Library/Extensions/FTDIUSBSerialDriver.kext) and see if that helps.

but you do have to assemble it

That was half the fun!

Seconds on that kit.  Its cheap, works great, and was fun to put together.

http://www.adafruit.com/index.php?main_page=product_info&cPath=16&products_id=46

You could also use a generic 28 pin part as a place holder.  In my eagle install there's a library called 'ic-package.lbr' that has a DIL28 part.  The DIL28-3 looks like the right size as the 5940s that I've worked with.  Obviously having a nicely labeled part is better.  

to get the outline of the pcb is pretty easy:
-open the layout with eagle
-print as pdf
-open pdf in illustrator
-use what you need

I did this process to create my black outline.  The resulting PDF is a mess of duplicate lines that took me quite a while to clean up.

To save anyone else that pain, here is a cleaned up outline you can download.

ArduinoOutline.eps