what is the best way to do DIY stage lighting?

 I am a DMX lighting guy. Go to cheaplights.com. They have lost of good lighting stuff cheap. Be sure and call for a quote, and then ask if they have any deals on shipping. They will end up giving you a good deal, just be nice to them. And to control the DMX lights you are going to need a interface. You can buy a velleman DMX usb interface for 75 bucks. Its the cheapest one out there. And it works with Freestyler lighting software, which is a free dmx control software. Just google the interface and find the website with the cheapest price. 

If you have any questions just message me.

 Par can's can be found new for 20 to 30 bucks each, by the time you mess around with hardware store components you can buy the real deal, and gel's are about a buck.  you can save money on the dimmer packs if you want by using Edison plugs and dimmers mounted to a pice of plywood. But you need to count the cost before you build something. You can purchase 8 par cans, 2 dimmer packs and a small controller for about 300 bucks if you shop around. I purchased mine from a national chain music store and I have actual built my collection up over the past few years to around 30 or so and I don't have that much money tied up in the rig.   

If you want to get REALLY cheap I've heard of a method that I've never tried... The idea is to take an empty coffee can, (one of the BIG ones) and mount a ceramic light base inside of it. Drill a hole in the back to run the wires out of, and rig up some way to mount it. Put your Home Depot flood lights in it, and you're done. Then you paint the outside black with high-heat spraypaint (most theatre lights are black). Like I said, never tried it. If you do it, and post an instructable on the process, throw in a "What! What!" for old Blksheep.

if your just after basic coloured lighting D.I.Y style you could use (and i fully expect you to laugh at this) catering sized bean tins they are about the same size as your average lighting can the you just need to make a simple stand and mount some lamp holders in the back of them job done

I've spent nearly a decade working as a lighting tech, high steel rigger and pyrotechnician. If you're looking for cheap lighting there is no better option than used Par cans just like in the picture above. The most commonly used is the par 64 and it is made by many different manufacturers. Back when I was still heavily involved you could buy a new par 64 for the neighborhood of 60 to 140 dollars Canadian (this price does not include the cost of the lamp). The major advantage here is that used par 64s are popping up all over, all the time. When a tour finishes or a theater shuts down they will often liquidate these things for mere fractions of the original price. As far as the unit it's self it has the major advantage of being one of the most adaptable fixtures available. Sound91 mentioned focus length above but what a lot of people don't realize is that you can switch out the lamps in a par 64 to suit different needs. Focal lengths are available from medium flood right down to very narrow spot. You can further focus a beam using barn doors (an equally cheap and available piece of equipment). There are also varying wattages available from 500 watt (500 watt medium flood or raylites) to 1000 watt. Par cans have the added advantage of being simple and easy to maintain. I've McGuivered more of these things in the field than you can imagine. Do your studying and buy some books on stage lighting. Practice and develop good timing. With a little bit of used equipment and the right knowledge you can make a very small amount of equipment go a long long way. Personally some of the best shows I ever pulled off were with only 12 par cans creatively coloured and focused. Oh and remember always always always tie off your fixtures with safety cables.

for rectangular halogen floodlights - add some smooth aluminium foil over the existing patterned reflector for lightbulbs - find a ceramic flower pot of parabolic (the mathematic shape parabola) interior and with hole in the bottom. cover its walls with aluminium foil and iron it on the walls with your hand. install the light socket on a stem through the hole and focus by moving the stem in / out

it depends on how tight a beam you want. As Maple butter put it you could do what are called barn doors. You can make these out of some heavy aluminum foil and use them to block light that is coming out of your can. As for stuff you are buying from home depot, you might want to look into some MR-16s or Par 38's these all come in varying beam angles. The range from very narrow to wide floods. The other thing you might want to do is look into a local theatre supply store for gels this way you can color you lights however you want and you won't be limited to the colored lights from the home depot allowing you to pick from a wider variety of beam angled light bulbs. The other thing you might want to pick up at a theatrical supply store is called black tack. This is a black metal tape that can handle the high temps. It would be a good way to hold your aluminum barn doors in place. You should also check around your local theatre scene sometimes theatres have lights laying around that are old and not in use anymore and can be bartered for. AKA I'll do some work for those lights you never use. I got a computerized lighting control console that way. Hope that helps.

Stage lighting is something that takes good instruments most of the time if you want it to look nice. I know that you can sometimes get Par Cans cheap. As I just realized, the picture you have there is exactly what we call a Par Can at my school. They are slightly focused, but not very much. If you want to go more expensive, you could buy source 4 ERS. They are a lot more expensive, but very good.