PeterH:
Are you sure you really want to have individual LEDs on? I'd have thought you wanted to have at least a few feet's worth of LEDs on, otherwise they're going to be almost invisible. This would reduce your control requirements by about an order of magnitude or so.
I can see your point, so it's definitely something I should keep in mind. You're actually probably right 
It would be cool to even be able to program it to have any number of lights on at once. Either way, IS THIS CONCEPT POSSIBLE? I'm assuming yes since the concept is pretty darn simple and straightforward. If it is possible, what is the best way to go about it?