Hi Karl
You can check out following projects on EG:
1. "engineersgarage.com/contribution/line-follower-robot-using-8051-microcontroller", this will help you with the LFR thing.
2. "engineersgarage.com/contribution/obstacle-avoiding-robot-without-microcontroller", this one will take care of the obstacle avoidance stuff. Although this is a microcontroller-less circuit, you can use its signals as input to microcontroller that is being used in the above LFR and then process it to generate the desired output.
Good Luck 