I agree, two output pins and one input pin (or more inputs for more effects) on either a PIC or Atmel will be pretty easy.
The 16F84 PIC (popular chip) or ATMEL 1200 (A non-RAM version of the 2313 popular chip).
Check digikey for prices, or other supply houses.. I personally would go with a Tiny11 for $0.50 a chip (keep the spares around for other projects), I have some on order to re-design a project using Atmel 1200s.
Atmel way:
Atmel has an STK-500 programmer (probably newer model now), or you can search the microcontroller forum here for a simple parallel port programmer you can make (I saw one in the last 5 days in one of the forums). I would go to
www.bastoc.com and pull RVKBASIC for the compiler as you are new and it will make life simpler.
PIC way:
The the programmer and software you picked is fine. I use the EPIC from MicroLabs and a Dontronics kit that was cheap and works (P16PRO40 type). I have MicroLabs basic compiler too (but it is NOT free).
Last thing on the programming language:
Last option on the compiler, there are free C compilers for both or you can learn assembler (OR RVKBASIC if you pick Atmel).
Just how much work and time do you want to put in the learning of the microcontroller? That is the real question. And people here, if you are detailed in the questions, and show you made an attempt, will help you out.