Which AVR for developing midi applications etc.??

I am looking to start devleoping midi controller devices, mainly ones with large arrays of buttons and LEDs (I would use a serial LED matrix driver).

Three questions:

  1. Which Atmel chip (or any other brand) would you recomend investing time and money on?? The guys from Monome are using the ATMEga32.

SHould I use soemthing that is better? Maybe somethign that can easily interface with flash memory?

  1. If I got the ATMega32 (or whichever uC) , what are the other key tools I should buy in order to develop code and debug it? e.g. USB-JTAG? AVR 40 PIN devleopment board? etc.

(My computer does not have a serial or parallel prot, only USB)

  1. What book is the bible for developing firmware? I studied this stuff a long time ago and I a tryign to re-teach myself.

thanks!