This Instructable is similar to some of my others (see links below), but represents the latest efforts to increase ease of integration, low cost, and practical use of ever cheaper high power LEDs. With each iteration, the roadblocks to using LEDs in real residential applications are reduced.
Step 1: Tools and Materials
The other key components are obviously the LED itself and the drive circuit. There are a lot of high output LEDs on the market, but for residential lighting, pure output is not the most important factor. The highest efficiency and highest output LEDs are "cool" in that their output is very blue and not appealing for general illumination in your home. This is often indicated by their color rating, given in degrees Kelvin. Cool white is in the 6500K range, with neutral white in the 4500K and warm white in the 3700K range. The problem for LEDs is that the mix of phosphors used to get warmer and thus more appealing light output become less and less efficient. So a top of the line cool LED might output 100 lumens per Watt while the best warm white LEDs would be in the 60 lumens per Watt range. Bummer.
After endless hours searching and purchasing various LED components I used the following parts to build a practical and relatively cheap halogen replacement for my over-sink kitchen pendant. I used a Philips Rebel 3-LED star. Many people prefer the Cree XR-E line of LEDs, and some of the Cree LEDs do have higher specs. However, the size of the Rebel allows 3 of them to be placed in close proximity which is critical for replacing a small bi-pin halogen. I used a driver circuit from DealExtreme, which ships direct from China.
Tools and Materials:
Heat Sink, $3
Bi-Pin Drive Circuit, $2
Rebel 3x LED star, $15
Thermal Compound, $7
A scrap of wood
3 Small screws (e.g. 4-40)
Drill bit and tap to go with screws
Solder and wire and the will to use them
Total cost is about $20 bucks if you have the thermal compound and screws on hand. This is far cheaper than in the past. Woot!