AVR-Chat

>
>I'd be tempted to start with Grayhill I/O modules for this.  They are 
>isolated which eliminates a lot of worries.  I know they work well at 
>isolating the micro from inductive kick back.

Exactly what I was going to suggest. :)

I see no reason that you couldn't take an AVR, add some protection/interface circuitry, and use it as an industrial controller.  Take the safety systems outside the controller though. I wouldn't trust that to software.