Hope I'm not hijacking too much, but Nara mentioned that Proteus simulates PICs. I'm more of an AVR guy myself. Which programs allow good simulation of AVR microcontrollers?
I have moved this post to its own thread to avoid muddying the water in the thread from which it was plucked.
As for AVR simulators, I would think it would be hard to beat the FREE simulator that is built into the AVRSTUDIO4 software available from ATMEL's website.