Revolution's first popular PIC system was the Chip Factory
http://www.rev-ed.co.uk/detail.asp?prodname=Chip+Factory&quick=1
This was designed in the mid 1990s to enable students to program PIC microcontrollers. It was designed to be used without a computer as IT resources were often limited in school Technology Depts at that time.
It became more popular when reprogrammable PIC chips (such as the PIC16F84) first become available, as that naturally reduced cost of using PICs - prior to that cheaper chips were only programmable 'once' - if it didn't work it had to be thrown away!
By the late 1990s thousands of units had been sold and the Chip Factory won many awards for its innovation. The Chip Factory itself was actually also based around a PIC microcontroller - a PIC that programmed other PICs! This naturally required a very high level of understanding of the PIC architecture and PIC programming routines etc.
The main problem with early reprogrammable PICS - such as the PIC16F84, was that they needed a 12V signal to enter programming mode. That was the whole purpose of all ZIF socket style programmer, as on the Chip Factory - to apply 12V to one pin of the chip so that it could be programmed.
In 1999 Microchip announced a new type of chip, the PIC16F872, that could also be reprogrammed at 5V instead of 12V. So the idea of the PICAXE was born - if you no longer need a 12V signal for programming you no longer need a programmer like the Chip Factory - a simple serial cable will do (as long as the chip has been preprogrammed with a bootstrap code that can accept incoming serial commands). And the cheapest serial cables with 3 signals that could be bought at the time were cables actually designed for early digital cameras, ending with a 3.5mm jack socket.
So a couple of PIC16F872 samples, an old digital camera cable and a couple of cups of coffee and the original PICAXE-28 was born.
Microchip later released suitable 18 (16F627) and 8 pin (12F629) devices, and then as more and more powerful devices came out more powerful PICAXE chips (A, M and X parts) were possible.
And as more PICs are released by Microchip, the PICAXE range will be updated. For instance Microchip surprised everyone by bringing out the much more powerful 28pin PIC16F886 at a far cheaper price than the existing PIC16F873A (used on the 28X). This enabled 95% of the planned (at the time) X2 upgrade such as increased variables, i2c slave mode and scratchpad memory to be included in a much cheaper device - and so the X1 was born. And the new fully updated X2 is coming soon...
