This video demos the Auduino DIY Synthesizer. It works on all Arduinos running at 16MHz – everything from the original Arduino serial to the Arduino Mega. It uses granular synthesis techniques to generate a distinctive filter-sweep sound that had much more character than boring square waves.
More details about Auduino here.
Make a DIY synth. It costs only $50!
Auduino is a granular synthesizer built on the Arduino platform. It was designed by Tinker.it! and published under an open source license.
I built one and plugged a stylus controller which was ripped from Gakken SX-150. It works very well. Its sound is dry and crispy, but I think it is not bad for $50.