[Synoptic Labs] stumbled upon an RGB light strip with individually-controllable LEDs. The strip uses 5 volts and is controlled by an HL1606. Because the strips are hard to find, this chip is mostly undocumented and he had trouble driving the strip. He was unable to get it working until he met with [John Cohn], who had previously reverse-engineered the serial protocol. Working together, they released a library for the Arduino to drive the strip. So far, the library only supports fading each LED, the only known functionality. If more strips like these were available, constructing LED matrices would be much easier. Embedded below is a video of the strip fading through the rainbow.
[Related: LED ambient light strips]