Becky Stern has a cool new video tutorial up over on Adafruit, using nifty sewable LED sequins, which lay flat on your project surface.
If you don’t want components sticking up from the surface of your project, and you don’t mind using a soldering iron, you might try making these: LED sequins.
- How-To: LED Embroidery @Craftzine.com blog
- LED Shoe Clips Make Your Toes Twinkle @Craftzine.com blog
- How-To: LED Robot Embroidery @Craftzine.com blog
- Free Fireflies LED Embroidery Pattern @Craftzine.com blog