I decided to start with one of the smallest AVRs available, the ATTiny85 with only 8 pins. With only 5 output pins available to me (using 6 would make me lose other chip functionality), I decided to experiment with Charlieplexing. Charlieplexing allows you to control many LEDs with very few output pins, by wiring up an LED in both directions to every possible pair-combination of the pins. In my case, 5 pins would allow control of up to 20 LEDs (5 x (5-1)). This would only require the ATTiny, LEDs, 5 resistors, and a power source.
More info on Charlieplexing: http://en.wikipedia.org/wiki/Charlieplexing
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Signing UpStep 1Planning out the wiring
In the next step you'll see how the wiring works out for a larger grid of LEDs.
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(Positive Voltage) > (Resistor) > (LED) > (Resistor) > (Ground)