An an interesting work of art and a neat addition to home lighting, Nicole Grimwood explains how to make an Android phone-controlled mood light with an Arduino. Communication between the Android phone/device and the mood lamp is via Bluetooth, and although this sounds complex it's relatively simple. The lighting is provided with some LED light strips controlled by the Arduino.
The control side is handled by an Android app that is written in processing, and Nicole has provided the required code so you can recreate your own version. The build and results are shown in the following video:
This is a great example of making a finished product you can proudly show to other (and non-technical) people. To get started on your own version, visit Nicole's Instructable. And for more, we're on twitter and Google+, so follow us for news and product updates as well.
If you're looking to make more creative designs with LEDs, consider the Freetronics RGBLED: full colour module. It includes a bright RGB LED on the top of the board and a WS2801 constant-current, addressable, multi-channel LED driver on the back. This smart module can be daisy-chained, so you can connect a number of these together in a string and drive each of the module colours individually from your microcontroller. For more information and to order, visit the product page.