I did this for the "Moonlight Ride" locally. I used some 12v lighting for motorcycles. It had a control box that would allow the LED units to smoothly fade from R/Gr/B/Yl as well as well as flash and do all sorts of other color switching. You could also just leave it on only 1 color too. It even came with a remote control.
I ran it for about 1hr 15min (never ran out of juice...not even close) on an 8-cell AA pack using Energizer Alkaline's and a RadioShack cell holder. Pretty easy and straight-forward.
My Dad got two of the unit's off eBay.
I also spent $9.99 on a T-Shirt with a graphic equilizer built in to the front. It "bounced" off a powered microphone unit that fit into a sewn pocket and you could turn up/down the intensity. I took off the EQ and mounted it to my Camelbak and set the mic. right by my PocketPC phone with music playing the whole ride. The EQ was bouncing on my back during the whole ride while my "G-Ride" down lighting was fading in and out of different colors.
I'll dig up pic's.