Project Aura is the brainchild of two Carnegie Mellon students, who challenged themselves to make a bike lighting system that would make night riding more secure. Currently, most bike lights focus on the front and back of the bike, and are all but invisible from the side; with Project Aura's wheel-mounted LEDs, bikes are unmissable from the side and more visible overall. You still need a headlight — these distributed LEDs don't look like they generate enough light for you to see the road, and it's not like you want to be hit from the front or rear any more than you want to be T-boned. But the Project Aura lights make your bike visible from all angles, and they don't depend on someone else's headlights to do it.
The project has a few other neat tricks up its sleeve: The lights run off the motion of the front wheel, and they change from white to red as you slow down. None of this is commercially available (for chrissakes, it was ginned up by a couple of undergrads), but D.I.Y.ers and manufacturers alike might find inspiration here. At very least it's cool to watch the night-riding pyrotechnics.