Two of our members are in the process of making LED staffs.  These consist of a clear tube with individually addressable RGB LED strip inside, battery, power supply, Arduino and various sensors.

More advanced LED POI we are working on include 9-axis inertial measurement unit (IMU) (3-axis accelerometer, 3-axis gyro, 3-axis magnetometer).  We coupled this with a wireless transciever to send data back to a computer while we're spinning. 

This project is a beginner LED POI that can be built for under $25 for a pair (if you scrounge a few parts).