One of the guys at the first DC Dorkbot meeting, Tim Slagle, brought a glowing orb toy he’d gotten on eBay. It strobes through the color spectrum using RGB (Red, Green, Blue) LEDs. I didn’t even know there was such a component. They look like regular LEDs except they have a driver circuit built right into the LED package. All you have to do is hook up power and ground and they’ll run through their color sequence. There’s also a four-pin variety (pictured here), with one pin for each color and a common cathode. You can use these for three status indicator lights on the same lamp, or you can generate a range of colors using pulse width modulation. Nifty! This type does not have an on-board driver, you have to drive it with an external controller.
Here’s a link to Spark Fun’s RGB LED catalog page for the 4-pin type.
Here’s a page that explores the technical details of RGB LEDs.
Here’s an eBay seller of the two-pin type.
Here’s a little movie Thomas Edwards made of Tim Slagle’s RGB LED Orb.
Update: Tim emailed me with corrections to the above item. There are two types of RGB LEDs, 2-pin with an on-board driver, and 4-pin that require external control. Changes made.