Howdy,
I saw this via Slashdot and it looks pretty nifty:
"Gameduino is a DIY game platform built on a shield for the Arduino. It's open source hardware (BSD and, for the code, GPL). Okay, that's fairly cool. But what makes this project special is that this inexpensive board has hardware that's capable enough to be interesting. The result is a lo-fi game console built on an FPGA that gives you retro graphics without being, you know, too retro. Games actually look good."
Check out the project website:
http://excamera.com/sphinx/gameduino/
And they are taking pre-orders via Kickstarter:
http://www.kickstarter.com/projects/2084212109/gameduino-an-arduino-game-adapter
Cheers,
Drew