The original BBC Dalek voice was produced using a ring modulator (two centre tapped transformers to mix two signals together) with some diodes to add distortion. The modulation frequency was around 30Hz, but did vary between stories and the two movies.
While you can easily construct a traditional ring modulator, the transformers and components are not cheap, so peope have started to explore alternative routes.
Following excellent guidance from Andy Grove, who published his project on the projectdalek.co.uk website, I was able to throw together a quick and easy voice changer for about £15.00.
Andy's project was based on an Arduino Uno programmable board (which has an Atmel ATmega328P processor). He wrote the software, illustrated the connection circuits, and shared it online.
His software produces the modulation sine wave and mixes this with the signal form a microphone. The Arduino then outputs a PWM signal which can be amplified to drive a speaker.
Here's a vidoe of our little one trying it out at the age of 2: