I really don't get what people don't like about the AVR Studio 5.
"Oh my god, it's 0.5GB large!"
Well, if you buy a computer today, you have at least 80GB.
It is really user-friendly, does Code Completition and looks nicer than the old one.
It is that retro-love again.
Or just being a PIC/NXP/STM/...-Fanboy.
Now, back to the topic.
I would recommend using an Arduino.
It uses a 8-bit microcontroller (using just 8 bits is something other than using 32 bits), is relatively cheap but also of a high build quality and you can start really easy but go in detail very quick. With the shields, you have a simple option to use advanced hardware configurations. And if you want to teach them how to make their own boards, they can still program their chips with the Arduino Hardware and the AVRDude Companion.
The toolchain of the AVRStudio 4, well, you could call it "good for teaching purposes" and the AVRStudio 5 looks really good, since it is Visual Studio based.
On the other hand, you do have a quite powerful tool with the LPCXpresso.
You do have an ARM system with all the extra functions.
The development platform is Eclipse based, so it also looks reasonable good, but from my perspective not as good as the AVRStudio 5.
The point against it is the hardware.
No DIP package, at least two power rails and a really complicated setup.
PICs are also nice, a bit like the AVRs, but I don't really know them.
Other µControllers like the RC8 or the STM series, well, if you like them, you could use them too.
Please choose.
I hope you'll find a good setup for your students.
Apexys