I know that Erik hates Elector magazine I do not, I have never seen the rag. I did, you are right, come out against the rag on one subject: when they made a microprocessor project the winner of a microcontroller competition. My beef is nor with Elekto, it is with the attempts to make the '51 into something it is not. There are x86 aboundant around if you want a microprocessor.

What I had in mind was to use a microcontroller that has an port that could recieve an ascii string. I would think that the same port could be used to download the program. If the same microcontroller had some parallel I/O then I could have both input and output relays connected to that. If this is possible then all I should need is the microcontroller, voltage regulators and relays, is this correct?
Yes it is possible.
Have a look at the P89C668, it gives you exactly what you need. If you can get by with less RAM the P89C51Rx2 will do fine.

One added thought: In the FAQ section <--- under hardware wuestions there is an entry about noise. Since you will be controlling realys, you will need to follow that to the letter, with relays shortcuts are the longest route.

Erik