An embedded system is like a minicomputer designed for a specific application.
Ugh. I hate computers.
An embedded system can be designed to monitor temperature, time, pressure, light, sound, movement, buttons or touch sensitive capacitive switches, like on the iPod... Infact, an iPod is an embedded system and so is your TV remote and your car alarm, and your alarm clock. An embedded system can have an LCD display, LED, OLED, a piezoelectric sounder, speakers, you name it. It could control motors, lights, actuators, thermoelectic coolers, heating elements... It could be wireless, battery-less...you get the idea.
I'm developing a concept that needs an embedded system. Where do I start? (hand gestures). I'm a designer. I don't know anything about electronics.
We can design and protoype an embedded system for you. All you have to do is tell us what you want it to do. (all laugh)