On the topic of Arduino Simulators, Simulator for Arduino v1.01 has been released, and there are now over 5000 paid users and around 20k users of the Free version. This Simulator has been improved over the last 4 years and features as the #1 or #2 Arduino simulator in most reviews.
Read some reviews here:
Smashing Robotics
Arduino Stackechange
Blog Oscarling
Duino4Projects
Element14 Community
