I am new to everything here and while I have been searching I havent been able to find an answer. What does everyone do once they have completed their project and want to use what they made but dont want the arduino always attached to it? Do you just make your own pcb board with the arduino parts as well as incorporating what you have added on to it? Thanks for any clarification on this. I am thinking what I said is what is done but not sure.
I've only done that once, but planning on making more stand-alone arduino based stuff. I bought some blank atmega 328s and burned the bootloader onto them (search the forum, one thread about that here: http://www.arduino.cc/cgi-bin/yabb2/YaBB.pl?num=1267120897/5#5) But usually so far I'm only experimenting/playing with it on a breadboard, figuring out stuff. Or trying to 
What I do is to make it on perf board using an ATMEGA processor. If you look at this project you will see how I did it.
Here's one I've used, Spikenzie Labs HardCopy. It's been renamed to ProtoTino
Rebuild your project on the board and free up your Arduino 2009 and Boarduinos for the next project...
Once you've done that once or twice, you get EagleCad, a programmer like Adafruit's USBTinyISP and start making your own boards, seeing how much closer to 1/3 the board area you can get. Once you get there, the EAGLE files for the shields are readily available so you can make custom shields for those projects where you want to attach a Boarduino or Arduino 2009 for limited usage.
And then for my next step, decide to make it smaller using surface mount and a hot plate as your board making and soldering technique improves.
I built a part for my PCB software that matches the ADAFRUIT boarduino layout. Then I built the MAIN board around that with what ever I did for a project. I treat the boarduino just the same way I would treat a Parallax Basic Stamp so it's not just for the protoboard.
I've used these...
http://www.pjrc.com/store/teensy.html
I'm always tinkering with the software so the six pin header and USB port are important on the "final" version.
Thanks everyone for taking the time to respond. All the info helped me out a bunch.
I would tend to use an Arduino Pro Mini, attach male headers and plug it into a 24pin DIL socket on a proto board - not the cheapest option - but it is compact and simple (no oscillator required, can reuse it later).