When the ARM company released their version 3 ARM processor, which stands for Advanced Risk Machine, they simply were sure that a revolution would take part of the embedded world. Today, virtually any process demanding devices like PDAs, cell phones or IPods use ARM. ARM has licenced the ARM core to other companies so some of them cuztomize it and make it a microcontroller like Phillips or Samsung. ARM is not cheap, ARM is not free. But, its architecture is simply classic for embedded developers. It looks like Microsoft and Intel will team up to put competitors for the ARM processors but I guess this tends to fail. ARM developers love its core, performance and above all: a huge network of developers that could help other developers.
There are several compilers that support ARM including the ARM suite it self. There are open source GCC versions for ARM ( as a matter of fact, many companies use it within IDEs for development ). I guess if one has a great goal, one needs to have the proper backup for this project: money. By having money, huge corporations can buy ARM compilers while small ones can benefit from GCC.
ARM's assembly, by its RISC architecture is not that hard to understand and its performance is naturally superior for small equipments that cannot carry x86 intel processors. They are small so that can fit in small electronic boards and dissipate less heat.
Internally starting from the new v6 ARM architecture we can have a multimedia tool, which just transfers huge memory portions to others with single instruction assembly commands. Starting from ARM 9E, they support DSP instructions.
Likely, ARM 11 will become the standard for embedded software..