All you need is:
high resistor (mine is 10 mega ohms)
tin foil or other conductive material
I build a housing for mine using an empty salsa jar and a toilet paper tube that happened to be the perfect size to snap together like legos.
Step 1: Code and Circuit
Update: added Fritzing diagram and schematic (Its a great program, check it out frizting.org)
/*this code is a cap. sensor that fades between 2 leds
* set up: pin 8 > high resistor > one wire to foil, one to pin 9
*Led set up pin 2>resistor>led>grnd
*based on http://arduino.cc/forum/index.php/topic,8609.0.html
* ajust if statment to fit resistor, currently using a 10Mohm
Once it is set up, run the code and open the serial monitor. Move the set up away from your computer to help diminish interference Note what numbers are being out put when nothing is near the foil sensor, also note what it is when your open palm is extremely close to the sensor.
Change the int low cap to just above the number output when nothing is near your sensor.
Change high cap to the number output when you are almost touching the sensor.
You will have to adjust these numbers often to "calibrate" the light. Many factor interfere with the readings to it needs to be set up whenever it is moved.
Step 2: Housing
To create the tree, I ripped foil into thin strips, about an inch wide, and rolled them between my palms into "wires." I then hot glued them down onto the jar. To make it wider in places I just glued several of them right next to each-other. Afterwards to make it apear smooth on top, thinly coat sections with hot glue then press on a small flat peice of foil. I used my fingernail to score around the ends and tear of excess.
I covered the cardboard base with paper, with hole for the power and usb wires.
Step 3: That's It!
It was a great introduction to arduino for me, and I hope it can help you too!
Sorry for the photo quality, will update if I can.
The video is of the light without the base attached.
Eventually, I would like to build my own circuit board for this so I can take out the arduino. I would also like to make it so that it does not need to be "calibrated" (any ideas?)
Questions, comments and feedback welcome! :]