So the way this works is the pump pushes air into the water filled tube which creates air bubbles and since air is lighter than water the bubbles rise to the top. So we MUST put a hole in the top for the air to escape or else the the air pressure will build up and eventually pop a seal some were or the pump will stop.
The lights use an attiny 2313 micro-controller to change the color every 60 seconds by basically flipping a switch on inside the micro-controller which sends power to that pin then waiting 60 seconds and turning that switch (pin) off and turning another on and doing it over and over again until you turn off the power to controller. mine changes from blue to green to red to white but you can use any colors you want. you can also add add more than four different colors. I did not use RGB LEDs because I did not have the money to get them from radio shack nor the time to get them from ebay and it was much simpler to program it this way.
if you want more info on how micro-controllers work check out the link below.