This is a demonstration of a light project I am working on (currently in its first iteration). Ultimately I would like to transform it into something more complex that has been rolling around in the back of my brain for some time... but baby steps.
As the project exists now there are two components, the computer and the Arduino receiver. My computer communicates over the network with my Arduino via an ethernet shield/router combo and a processing sketch on my computer. The arrow key presses made while the sketch is running are sent as UDP packets to the Arduino which then uses them as commands to control an LED strip. A linear crossfade is built into the code for transitioning from one LED to the next.
Code for this project, including the Arduino and Processing Sketches, can be found at the link below