It is all done in code. This was just a test program to make sure that the LEDs worked. The brain of this circuit is the PIC 16F877A microcontroller. Any of you PICAXE fans out there will know this as a 40x2 surface mount. I used the CCS C compiler. I believe that Hi-Tech C is offered free by microchip now for development on their chips. I have a sumobot code repository where I put my code. If anyone is interested look here. I haven't put the new code there yet.
The other day I was playing with the 555 timer to make an LED blink at different rates depending on resistors/capacitor. Anyway, I was wondering if you used some sort of circuit with decade timers or are you coding it? Just would like to know a little more on how you developed your dancing lights. They are pretty cool. :)