WS2811 or WS2812 based LEDs / RGB pixels are cheap and easily available on the online stores. They run off 5 volts and can be addressed individually. Waterproof versions are also available.

On Ebay/Aliexpress/Alibaba they are sold as a set of 25 leds / RGB pixels connected together. Multiple such strips/chains can be connected together to form longer chains of light.

Unfortunately they mostly come without any power source or controller. Normally for a 25 RGB LED chain based on WS2811 consumes about .3W (please refer to manufacturer datasheet for exact requirements). So it can be powered from almost any ordinary 5v adapter, even mobile phone  chargers (with sufficient current supply capability) can be used.

For controlling the rgb lights and changing colors and effects an Arduino can be used. The “FastLED” project on GitHub is a nice library. It has many examples also. The library supports Arduino and various type of RGB LED / RGB Pixels. Here is the link to the GitHub repository:  https://github.com/FastLED/FastLED.
I am attaching the Master here as on 23-05-2016 in case the library goes off GitHub for some reason. The code belongs to the developers and contributors (https://github.com/FastLED/FastLED/graphs/contributors)
And here is the Arduino Library only as on 23-05-2016. The version is 3.1.0