LadyAda has kit you might like: http://www.adafruit.com/index.php?main_page=product_info&cPath=6&products_id=5
Now I haven't bought the kit, but it sounds like lots of fun. And even if you don't want to buy it, you can read the instructions.
I believe it uses a shift register or latch for the same purpose you want: to conrol leds. She also has some kind of program for creating the image.