Also known as Christmas lights . I'm electrical by trade and am amused by electrical gizmos. Even though LED's have existed for decades, only a few years ago did anyone ever think of turning them into Christmas lights. Previous sets I've seen have been expensive, dim, and flickery. Recently at Crappy Tire (Canadian Tire) I picked up a multi colour set of 70 lights for $10. I'm actually pretty impressed. They are approximately the same size as "mini lights" and quite bright, and the colours (red, orange, yellow, green and blue) are very brilliant. They do have a noticeable 60Hz flicker, but It's something I should be able to fix with a few cheap electrical components. I checked with my power meter and they do use only 2W for the whole set. I'm half tempted to leave them up (inside) all year round for mood lighting.
Ah, I like LED's but not for Christmas lights. We have some at my mom's house, and if you are sitting in just the right spot, the light can be blinding. They are too focused of a light for my taste. I like to old fashioned warm glow of regular lights.
I've contemplated switching too - but I've got all of these old traditional ones to work with... so I put them out again this year.
We have a set of 200 blue LED Christmas lights which we bought new this year. They are run from a 24V AC transformer followed by a controller box, and they have no 50Hz (UK is 50Hz) flicker at all. I normally notice that flicker more than most people, perhaps because also having an electrical background I know what it is. So I assume the controller has rectification and some smoothing. As you said, the LED ones are almost as bright as bulbs, run cool and use much less electricity. They should also be a lot more reliable. Because LEDs produce a single colour light, unlike bulbs which produce white light and are painted to appear a certain colour, the colour with LEDs seems to be stronger. So blue really is blue and not a white-ish blue.