I was in bike-brainstorming mode a while ago - before I spotted this thread. From my notes I seem to recall that:
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It seems possible to fit an Arduino Nano board (http://www.arduino.cc/en/Main/ArduinoBoardNano) inside the handlebar tube. A series of rechargeable AAs could also fit in there.
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I was thinking of taking some old speed shifter levers (I'm converting one of my bikes to single-speed) and trying to convert them to electrical switches - although I haven't thought of the waterproofing question yet :-/