Peggy 2.0 is a multiplexed matrix display of 25 by 25 LEDs from Evil Mad Scientist Laboratories. This version comes with an ATmega168 loaded with the Arduino bootloader, and can be programmed directly from the Arduino environment using a USB-to-TTL cable. The programming Peggy 2.0 page has more details and example Arduino sketches. You can buy a kit from the Evil Mad Science store.
Projects like this help demonstrate the value of open-source hardware. One of our motivations for opening the Arduino software and hardware was to make it easier for people to build cool projects like Peggy. If you’ve got an idea for a project of your own, check out the Arduino hardware page for the board designs and the hacking section of the site for information on extending and modifying the platform.