University student James Khazar has created a simple way of interfacing between a Flash application and and Arduino board. With it you can demonstrate control of the digital outputs, reading digital input status, analogue values and so on. The software interacts with the Arduino via data along the serial line, such as commands to the Arduino, and data such as the potentiometer value is returned to the PC.
To get started with your own embedded-Arduino projects - look no further than the Freetronics LeoStick. Apart from being one of the smallest Arduino-compatibles on the market with USB, it also has an onboard RGB LED and piezo for sound and it's own form of knock detection: