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The Game Boy Advance and Color (especially) are inexpensive and very well documented. The GBA has an ARM processor

I can speak from experience. GBA is a joy to program for; it's much like programming an MS-DOS PC in C, as once you get your libraries done, everything else is pretty smooth. Start here for tools and documentation, and go here for hardware, specifically the MBV2 cable (load 256 KB programs directly into GBA's RAM) and the Flash Linker (load up to 128 Mbit (16 MB) programs into a flash cartridge). However, try to buy them sooner rather than later, as Nintendo will try to sue the makers out of existence, claiming that the devices are suitable "only for piracy" and ignoring the homebrew development scene.

• The dreamcast has an EXCELLENT community built up around homebrew

Good point. Also, how about the Gameboy Advance? Cheap hardware (free emulators easily available), decent developer resources, plus it restricts you to realistic projects and obliges you to be disciplined during design and development.

The compiler is time limited evaluation ware with a hack, or you could beg poverty.

It's a fun platform that teaches valuable skills, and it's realistic. Go for it!

That would be nice, but luckily hobbyists can use gcc and friends to build stuff for GBA. Check out gbadev.org for info. There's also plenty of homebrewn demos and source to try out.