The interest in Arduino reminded me of an ad in back of Retro Gamer magazine for DIY game console kits. The kits are sold for use in teaching oneself game console hardware design rather than software and as such the graphical capabilities are limited. However, the same people make a few other series of kits, with their Chameleon series described as a supercharged Arudino which includes a Parallax Propeller (never heard of it either) 32bit, 8-core slaved CPU that is reportedly fully compatible with Arudino programs in the case of the 8-bit version containing the same Atmel primary CPU as the Arduino lineup. No idea if that's true.
Note that I've not nor do I know any other who have ordered one of these kits, but if someone's looking for a purchase with legs something in their lineup may fit the bill. I might be getting the Hydra Pico just to say I built a game console.
http://www.embedds.com/you-can-build-games-with-el-jugador/
just hit my rss feed. Also propeller based. $30
Propeller is fairly common.
So - outputting analog video is actually really pretty damn simple, it just requires some basic timing. You can put it out from a pretty tiny processor. It's on my list of stuff to work on, got some parts coming in from china.