It does need a programmer, it just happens to BE one as well =).
There's actually a way to use the FTDI chip in a "bit-bang" mode to get it to program via the on-board ICSP connector; so you can update the bootloader on-board, with no need for a "real" programmer. With that said, though, I've heard that having a real programmer is far better and reliable than any other method. But to start out, the bootloader is there (along with avrdude) to make things easy.
The price range is right and the support is out there (as it's a kit not an actual AVR device) but it's definitely a good way to go.
The word "kit" kinda implies you have to put it together yourself; just so it is clear, this isn't necessary for the majority of Arduino Duemilanove clone boards; they're pre-assembled with a bootloaded ATMega328 on-board; just download and install the software IDE (free), plug in the USB cable, and you can start hacking on it.
I personally like it because it is very flexible and powerful (and the IDE has been ported to other Atmel chips - ATTiny, larger Megas, and to an extent even the xmegas); you can stay simple with the board and software as it is, or treat the board as a carrier board (which is all it really is), that has on-board USB support and a regulator, and use avrdude and avr-gcc (like you would with any other AVR) to compile and upload the code (if you really need it, you can set up Eclipse as well - I've also heard that CodeBlocks can be used).
There's also RTOS-like systems available for the Arduino - if that was something you wanted...lots of options and expansion possibilities.
From what little I've heard of them they're a good way to get your feet wet. I went a different route, but nothing like that existed when I started learning AVRs.
Yes they are; I originally started playing with a Basic Stamp 2 a couple years back for a project I am working on, and I ended up switching to the Arduino when it became apparent that there was no way for me to get the Stamp's bytecode compiler to work under 64-bit Linux; I certainly didn't feel like playing with assembler (I can code in it, but I would rather reserve it for when it is absolutely needed, than have to do everything in it), or using Windows (been using Linux since 1995). In some manner I found the Arduino, and have found it to be perfect for my needs.