When they first came out I used one to build a UAV on top of a 6' electric glider. The Arduino simply controlled the PWM's for the rudder, elevator and motor and then fed sensor data over a zigbee. My laptop, connected through a zigbee, actually flew the plane. I had hacked together my own INS from accelerometers and magnetometers, plus a joystick to override.

Was fun until it crashed into a pond after a stupid code update that had the IR sensors invert the sky and ground.