Phew... I'll try answering all those questions... here goes...
I've learned a bunch going to...
Light-O-Rama:
http://www.lightorama.com/
Light-O-Rama forums:
http://lightorama.mywowbb.com/
Do-It-Yourself-Christmas forums:
http://www.doityourselfchristmas.com/forums/
Planet Christmas forums:
http://talk.planetchristmas.com/
Light-O-Rama is an awesome company and they make an awesome product. In the beginning of this thread I talk about their controllers and the software used to synchronize the lights to music.
Basically the L-O-R controllers can control 16 different "channels" of light. Each channel can be turned on or off, dimmed, flashed, faded up or down, and "sparkled". And L-O-R controllers can be connected together with simple phone cable up to 255 controllers.
I'm using 9 this year but 255 would be nice.
Just start reading at the above links and you should be able to get a handle on what is needed to start doing this. L-O-R has a starter package that includes a 16-channel controller and the software. I saved a TON of money because I bought 8 of my kits completely unassembled. I soldered all the components to the PCB and did all the assembly into the cases. (Again, you can same a TON of money this way...)
If you get into it and have any questions, feel free to ask. I don't know a lot about this hobby yet but I'm getting there slowly. I'm already looking forward to 2009 when I'll have more time for things other than the basics.