The first parts have arrived, and PCR testing using this setup will commence this week. 

The initial prototype uses:

• An clone Arduino Nano
• 1x LM7805 voltage regulator
• 2x 2SK3561 N-channel mosfets
• 2x LM335 temperature sensors
• 2x 22 ohm 4W resistors
• various resistors and capacitors
• cable ties!

Of course using an Arduino nano will blow the $5 budget, even using very cheap clones bought online from China. So in parallel with the PCR experiments, I'm designing a new system based on the new ATTINY841 micro controller together with the V-USB serial library, as modified by Ray and described here: http://rayshobby.net/?p=7363.

I expect I will have to move to surface mount components to get under $5, but for the moment in using through-hole parts to get a working system up and running. I should mention that you'll have to bring your own power supply, with an output of 9v and about 2-3 amps, to get this thing running.