This little 16 button USB MIDI controller is made from stuff I had laying around, but you should be able to buy all the parts on eBay for less than £15. Using the MIDIUSB and Keypad Arduino libraries, I managed to get the controller working with multi-touch capability. I programmed the rotary switch on the side to switch between three MIDI channels, and I used the three LEDs on the front to indicate which channel was selected.
I found that some software (eg Sunvox) would not natively recognise the on-the-fly channel changing, but I managed to work around that by creating three instances of the controller using MIDI-OX (free software utility). I should probably have been switching banks instead of channels, but in any case it was a fun little project and served as a nice introduction to MIDI.

Required Hardware
3x 5mm LEDs (I used different colours)
3x 5mm LED bezels
1x 3 position rotary switch
1x knob for rotary switch
1x 16 button keypad
1x Arduino Pro Micro
1x Micro USB cable (approx 4mm diameter)
4x 3x16mm wood screws (for the base)