Choosing the right microcontroller
I use 8-bit microcontrollers, some 16-bit (TI MSP and Atmel xMega) for hobby projects.
Size of memory are not something I consider much. Most of my project ideas rarely exceed 4K in code size, unless it has some heavy math or bad delay loops or something.
First of all, packaging. Is it gonna be a prototype, or am I ordering custom PCBs (DIP vs SMD)? Then I start counting all the I/O I need so to not put in a overly big part in my design. When I have found the package with the correct pin count, I start to look closer to the project idea itself and look for peripherals needed. Timers, PWM, ADC and serial buses are what I use the most, but many times I don't need either of them.
I almost always use Atmels AVR, I just feel so stuck with them. I know what's wrong when things are wrong, and I know exactly where to begin when I want to expand my knowledge on them (wanna learn I2C? PID loops? just check out the atmel app notes!). I know AVRs are cheap compared to most 8-bit micros, so I gladly pay for them where they're priced reasonably.
And by the way, digi-key, farnell, rs components and all the other major distributers charges huge money for shipping to Norway, so availability in sites like taydaelectronics.com and futurelec.com is a huge plus.