Software sequencers are the best because there's no limit to the sounds you can loop. A lot of people actually do their final mixing with one, vocals and everything. Precise timing is a must and you can also add plugin effects and synths and stuff like that.
I started out with an Alesis drum machine. Once I got the hang of it I tried a freeware seqeuncer called Leaf Drums. If you can't find it just PM me and I'll turn you on to my old copy.
Then there's the higher end sequencers like Fruity Loops and Cubase. I use Fruity Loops simply because I'm a kook and I like the idea of a sequencer called Fruity Loops. It's fairly user-friendly and has actually got quite a few useful applications and the new one even has a wave editor. Started out as a beefed up version of another free drum machine called Hammerhead which has some cool stuff with it but it's all in mono.
Definitely a sequencer. I ended up just sampling all the hits off my Alesis and transfering them to PC.