The USB i-Buddy is a USB gadget specially designed for Windows Live Messenger (MSN Messenger) users. It is a physical representation of your buddy.

You can program the i-Buddy to recognize a particular buddy account, and it will response to all messages and status events sent from your buddy.
i-Buddy is 3-inches tall and connects via USB to your PC.
The "real" i-Buddy looks a bit scary to me, especially when his head glows red.
Features of the i-Buddy include live motions and effects upon receiving MSN messages, Its heart glows when your buddy comes online, Its wings flap and body twists when messages are received, and Light flashes in different colors when different emoticons are received.

The i-Buddy sells for $20.
More details on the Brando site.

The i-Buddy is a cheap and limited version of the NabatzTag WiFi rabbit or the Tux Droid Robot.