Atmel STK500 and Atmel Studio
Benefits of STK500? Sure:
- It has push buttons
- It has LEDs
- It has easy accessible connectors to any controller pin

Actually that's all. If you want/need to make use of this, buy both. Use the STK for "rapid prototyping" and the Dragon for debugging.
But if your budget allows it, have a look at the STK600 instead of 500. It's more expensive, but not so "old-fashioned", and it has much more features.