I recently wrote up a blog post designed to explain how the classic Hello World blinking light sketch works all the way down from the arduino library calls to the hardware and back again:http://www.urbanhonking.com/ideasfordozens/2009/05/an_tour_of_the_arduino_interna.html
I tried to write it up so that it would be comprehensible to people
who are somewhat familiar with programming and have done the basic stuff on the Arduino but have never thought about AVR architecture or looked into the software internals before (i.e. myself not that long ago).
The post is a bit long, but, I hope, very readable. I'd love any
feedback the people on this board might have both to check for accuracy and clarity. As I mention in the post, I'm planning on doing a series of these if for no other reason than that writing them greatly enhances my own understanding of things.