You may have seen this on the Makezine blog earlier today.
This is a metal art piece created by Mike Rivamonte. He has built many creative robot sculptures using vintage metal parts from cameras, musical instruments, etc.
Many of his robot sculptures include some light-up elements, but for this flying saucer he wanted to take it to the next level. The two cymbals comprising the main body of the saucer sandwich a ring of over 60 ShiftBrite RGB LEDs controlled by an Arduino.
Two "particles" can sweep around the ring of ShiftBrites. Each particle has a pair of potentiometers to adjust their hue and speed/direction. A fifth potentiometer sets the fading decay speed for the saucer, allowing Mike to select how long a trail the particles leave in their wake. As the particles and trails cross each other, the colors blend smoothly together.
Here is a video showing some of Mike's concept drawings and description of the character background, and a demo of the finished sculpture and LED effects near the end: http://www.youtube.com/watch?v=5b9_DKEjKt4