Any AVR microcontroller is an 8 bit computer in a chip designed and manufactured by ATMEL Corporation. It has some RAM memory and ROM (Flash) as well. To make things more attractive and useful there is also an EEPROM memory. Including AVR core CPU all these are more than enough to say that it is a small computer where you can execute programs stored in Flash memory, run them while operating data in SRAM and storing some constant values in EEPROM. Comparing to real computer that sits on your table you can say that AVR core is a CPU like AMD or Pentium. Flash memory would be your hard drive where programs are stored, RAM is RAM nothing to add there. EEPROM probably can be compared to some media device like CDRW. Anyway this is only similitude in different scale.
AVR microcontrollers aren’t limited with core CPU and memory. The main thing what makes them valuable (and any other type of microcontroller) – they are rich in peripherals inside chip. In most cases you will find USART, I2C, SPI, ADC, Timers/Counters, and bunch of I/O pins. Single chip alone already can to do massive work. I believe there is no need to go more in details about more specific details of AVR microcontrollers as these can be found in datasheets.
If you go to Atmel site you will find that there are several types of AVR microcontrollers. Simply there are tinyAVR series that are small in size and are perfect for smaller applications. These are tight on memory so sometimes it is better to program them in assembly language to unleash the power in compactness. Next would be megaAVR family. They are much richer in memory and peripherals and can do more serious job. If not enough there is higher level – AVR XMEGA which shifts to 16 bit technology with 8 bit capability. Here you can find few more advanced peripherals like DMA, DAC. Great thing is that they are still compatible with lower families sharing same AVR core. And of course AVR32 finishes the AVR line. These are 32-bit AVRs that can deliver high performance and DSP functionality. In this tutorial we will stick with tiny and mega AVR for a while as these are most common, cheap and easy to deal with.