Some time ago I hacked a set of GE Color Effects Christmas lights to make a 7x7 display: http://blog.jgc.org/2011/11/turning-ge-color-effects-g-35-ch... Since the LEDs in the GE set are addressable the display can be programmed.

Also, if you're into Ikea 'hacking' then here's some fun with the Ikea LILLABO train set: http://blog.jgc.org/2010/01/more-fun-with-toys-ikea-lillabo-...

Let's skip the blogspam: http://wiki.openpicus.com/index.php?title=IKEA_RGB_Led_Strip...

The 12VDC power supply is sufficient to power both the lights and a Netduino or Arduino. Just desolder the little controller it comes with. There are 5 wires, but the colours are not intuitive. For example, the black wire is +12VDC and blue is ground. With a few transistors and resistors, they are really easy to work with.

If interested in building this, you might consider this option:

http://www.amazon.com/Ledwholesalers-Changing-Flexible-Yours...

I bought this one and it is pretty cool: http://adafruit.com/products/306

A little bit more expensive though, because it has a microcontroller every 6cm.

Lots more Ikea hacking at: http://www.ikeahackers.net/

For those too lazy to build your own, Delcom has some really cool USB programmable lights. I use this for alerts and as a killswitch: http://www.delcomproducts.com/productdetails.asp?productnum=...

I wonder if one can make a DIY "ambilight" with this? (Ambilight is when a TV lights up the wall behind it with the colors from the screen)