This is a Christmas light door panel I made for a door decorating contest. I lost. Anyway, I thought I'd post it here. Mine fits the dimensions of the door, but you could make it any size, and use any amount of lights.
The advantage of using Christmas lights (as opposed to LED's for example) is that they are pre-wired and come with little controllers already installed. Some people here on Instructables are good with Arduino and could certainly make more and cooler lighting patterns, but these lights have a couple options.
The disadvantages are that they are incandescent (use more energy), somewhat fragile, burn out sooner or later, and you can only use the "programs" they have installed already. But not soldering several hundred points had it merits, so I went with Christmas lights. Enjoy.
(I can't get the embed to work, so here's the YouTube URL
http://www.youtube.com/watch?v=HKXj4Y5nFOs

Step 1: Tools and Supplies

TOOLS

Saw (circular, table, etc..) I used a circular saw with a fence.
Nail Gun (w/ compressor)
1 inch brads
Wood filler (putty)
Putty knife
Paint brush
Paint roller
Paint Tray
Sander (I used an orbital)
Clamps
Hot glue gun
Hot glue
Soldering iron
Solder
Heat Shrink
Electrical Tape (Different colors)
Wire Cutters
Utility knife (box cutter)
Drill w/3/8" bit

SUPPLIES
Pegboard (4x8)
Strips of 1/4 Plywood (for the frame)
Small pieces of 2x6's (blocks for the frame support)
Christmas lights (100's; I used more than 600)
Paint
Wood glue
Brush for glue
Extension cords
Power strip

Step 2: Filling and Sanding the Pegboard

You can cut the board to whatever dimension you like/need. Then do the math (half the holes) to find out how many lights you'll need. For example, most multi-function light sets have three loops of lights intertwined. So if the pegboard has a multiple of three as it's number of columns and rows then your ability to make symmetrical patterns is easier. Next, you fill the holes.
This is simple, if a little tedious. You are going to fill every other column and row with wood filler. But first you should tape the back of those rows and columns so the filler doesn't fall through. Depending on your patience and/or skill this could take a few passes of filler and sanding. The better job you do now, the smoother the paint will be.
It turns out I had to drill out the holes slightly so the glass bulbs wouldn't contact the board, so after filling 600 holes, then drilling another 600, it might have made more sense to have use hard board and just drilled the holes from scratch and save the putty, but without a drill press, I think my grid wouldn't have been very symmetrical. Something to consider.

Step 3: Building the Frame

First I made a cutout for the doorknob, but if you're just making a regular panel then you can leave it out. I used thin plywood strips for the frame to keep it light, but you could use 1x3's or whatever you liked. I glued the edges of the strips with wood glue, then nailed brads through the pegboard into the frame strips. My dimension were approx. 30x80 because it was for a door, but again you can make yours to fit. I made a similar one years ago about 2x3. It went faster.

Step 4: Paint

First I made some cutouts for the controller, so you could reach it when this is mounted on the door/wall, and then a small slot for the cord from the power strip that will be mounted inside.
This was somewhat of a scrap reuse project, and I didn't have primer, so I just went ahead and painted. With red in particular, this is a bad idea. I used at least 7 thin coats to cover the board. In retrospect, I considered other methods of covering the board with contact paper or even mylar with spray adhesive. But it happened to be a Christmas thing, did I mention I lost the contest? so I went with red.

Step 5: Wiring

   This is certainly the most complicated step. If you are using multi-function lights, you have the opportunity to make a cool pattern with the lights, taking advantage of the three loops in one stranding.
    My original concept was to make one set of concentric rings, the largest being the outside ring of holes. This required that I wire all the sets of the lights (5 sets of 150) to one controller. I spent quite a bit of time with this, as you can see from the pictures. I should say first that I kept cooking the controller during the soldering, (maybe crossed wires causing shorts) and after ruining three or four I ultimately abandoned this method for five sets of light rings, each with their own controller. (I bought more light sets after the dead controller mishaps) But I'll tell you the method if you would like to know.
   If you follow the wires coming out of the controller, you'll see the first wire goes to the first light (and then the fourth,seventh,tenth,etc.,) the second wire goes to the second light, etc.. the fourth wire is the return to the controller. Some controllers have the (AC) power wires coming from this side of the controller, so follow the wires carefully if you go this route.
     I started by color coding the individual strands i.e. yellow tape for the first wire, then coding the wires coming out of the controller. Remember to code everything before you cut! Then gather all the leads from all the yellows from all five (or however many) sets and solder them all to the yellow lead from one controller. Repeat for the other two light lines and then the return line. Hopefully you will then plug in the controller and everything will light and be work from the one controller. Resist the temptation to solder end to end; it will dim the lights and eventually short.

   In any event, I went the five separate set route, and when they're are all plugged in to the same power strip, and you turn on the strip, they all sync up anyway (excluding the center core of each section. These are a different brand of lights). You can see this from the video at the end.I would suggest having the lights on and set to a pattern that discerns between the three strands when you are wiring them up so you can keep track of which strand you are putting in.
   I used a small bead of hot glue inside the hole on the bottom and a small bit of the top of each light barrel, not on the glass if you can avoid it. Try not to use too much, as it will drip down the front as you push the light in and look crappy, and also more glue takes longer to harden. Trust me, when each step is repeated 600 times, the difference between five or ten seconds of drying time adds up. It took several hours for this step. Just put on some music, get in a rhythm, and check your work from the front every several lights. You don't want to have to pull out thirty lights because you made a mistake.
Once you have the five section of three rings done, you have another decision to make regarding the centers of all the sections. I used ones and twos from two other sets of lights to make independent patterns to sync with themselves, but looks OK in context (check the video)
Finally I drilled small holes in the frame allowing access to the function buttons of all the 6 controllers, (I had earlier made the bigger cutout for the one original controller when I thought that was going to work for me,) and then with a little bit of hot glue mounted them to the inside of the frame. You change the program with a pencil or something skinny.

Step 6: Light It Up

For whatever reason the embed code thing isn't working for me, I'll try again later, but here's the YouTube URL...

http://www.youtube.com/watch?v=HKXj4Y5nFOs