Step 1: What You Will Need

Dreamcast (duh)
Philips screwdriver
Soldering Iron & solder
Led (any color, bright ones work best)
(Thats it!)

Step 2: Dissasemble

1. Make sure you remove any disk from the tray before beginning (it prevents the console from being opened)
2. Flip the System over and remove the modem (press down on the clip and pull it off)
3. Remove the 4 screws holding the case together (one in each corner, don't forget the one where the modem was)
4. Flip the console over and gently pull the top half of the case up

Step 3: Get the Controller Port Out

1. Unscrew the 4 screws holding the port down
2. GENTLY! pull the ribbon cable out of its socket and the power cable for the fan
3. Pull the board out (you might have to lean it back to get the plastic ports out of the case)

Step 4: Replace the LED

1. De-solder the led
2. Solder in your new led
3. Plug it all the wires back in and hook it up to power and test the led (Don't touch the power supply for gods sake...)
4. Re-Assemble the console

Done, enjoy