One of our favorite toys is the Line 6 POD. For those of you not familiar with this, it's a digital amp modeling effects box. There's a bunch of popular amp sounds and effects that you can dial in easily without a bunch of fussing with it. It was designed primarily to be a recording tool, but you can also punch it through an amp or PA to play live.
For recording, this box is great. If you use any PC based software such as Cakewalk it works like a charm. You want a classic rock Marshall sound or a modern Rectifier sound? You got it. Country twang or classic blues? Just dial it in.
The POD is also the ultimate headphone practice amp.
Playing live with it is a bit tricky. We've had the best results using it through a PA head which is then plugged in to a regular lead cabinet. You can also use it with an amp but it sounds a little muddy and requires a bit of tweaking. Plugging it into an effects port on an amp has better results but usually bypasses the preamp and cuts down the power. If you like the sounds that the POD produces live you should then take a look at their amp lineup which incorporates the same digital technology.
Every guitar player, from hobbyists to pros, should find this a really neat toy.