OllyR:
Ok, im a bit of a noob here myself, but considering how i understand how the arduino works, i would split this into two sections.first: get the data into the arduino.
second: THEN decide what you want to do with the data.
I'd do it the other way around. Create a simple light show first using imaginary data, then try to get the data.
If you do it your way you'll be doing two things at once and you won't know if the bugs are in the input or the output.