Microcontrollers are wonderfully useful devices. They incorporate all necessary parts of a complete computer into a single IC that need almost no external parts to run. Microcontrollers usually cost from $1-$20 depending on features and size.
Anything that is computerized but does not have a full-fledged PC inside most likely uses a microcontroller. This includes things such as audio/video equipment, watches, microwaves ovens, and more. A microcontroller is different from a microprocessor in that a microprocessor usually requires a number of external parts such as RAM or ROM to operate. A microprocessor such as a PC processor can't do anything by itself without a motherboard and associated chips connected.
A microcontroller is sometimes referred to as an embedded processor because it can be embedded into a device that has some function other than being a general purpose computer. This generally implies that microcontrollers are less expensive and less powerful than a full-fledged microprocessor, but don't be fooled! Because a microcontroller can be dedicated to a specific task, it can actually do many things that a full PC is not very good at. This is because a microcontroller and its program are very tightly integrated. Time-critical applications are very well suited to a microcontroller. Often in PCs, timing-sensitive tasks are performed by a microcontroller. A keyboard or mouse is a good example. If a PC spent all its time scanning the keyboard and mouse, it would have trouble doing other tasks. Instead each device contains a microcontroller that monitors user input. When something happens that the computer needs to know about, it sends a message to the computer. The computer doesn't care about the keyboard or mouse except when there is input. This also give others advantages such as reducing the number of wires needed to connect peripherals. The first PIC ever designed, long before Microchip Inc. was around (General Instruments were the original PIC developers) was made for the specific purpose of offloading work of I/O and other tasks from the main CPU in a large computer.
http://www.andrewkilpatrick.org/mind/pic/introduction_to_pic.html
