The lights are controlled using hardware and software from a
very fine company called Light-O-Rama.  Below are some
pictures of the hardware and software.  They have a free demo version
of their software that I got started on.  I'd recommend starting
with that to see how you like it.  If it's something you want
to try then you can buy the software when you get the
hardware.  A new version of the software was released this summer.

When I synchronized my lights, I do it to music.  But you can also
just animate your lights to do whatever you want.  This is much
easier to do as you do not have to match the beat in a song.
I used animation in the backyard for the 6 color Christmas tree.

Click any picture to make it full size.

 

This is one of the controller cards.  This happens to be a 16 channel card.	A different view of a 16 channel card.
A 16 channel card temporarily mounted in a weatherproof enclosure.  The card has 2 sides.  Channels 1-8 on the left, 9-16 on the right.  The black and white wires power their respective sides. The green wires are custom made extension cords that lead to each set of lights I want to control with that channel. The gray wire is the Cat5 cable to communicate with the computer and other controllers.	This is an old screen shot of Wizards of Winter. About 10 seconds worth.  This sequence is broken into 1/10 second increments.   All my current sequences are broken into 1/20 second increments and go down into the 1/100 second increments for the drums in Techno Jingle Bells.

Each controller card comes standard to power 15 amps on each side.
This is your typical outlet in any house.  The cards have an optional heatsink
that allow you to power up to 20 amps on each side if you swap out the fuses. 
I chose this route to reduce the number of controllers I would need. 
But to do this I had to have 20 amp circuit breakers installed in my electrical panels.
And yes, the wire was upgraded to 12 gauge to handle the higher amperage.
 

Now you need something to plug the controllers into.  Since the
controllers are outside controlling lights exposed to the weather
it is highly recommended to plug everything into GFCI outlets. 
I have 20 amp GFCI outlets installed around the house.
Current count is 26 GFCI outlets.

Your standard 20 amp GFCI with LED indicator
to let you know when it has been tripped.
 

Since I have 20 amp outlets, I need to have 20 amp plugs. 
I made these using 12 gauge wire and 20 amp male plugs.

A nicely made, heavy duty 20 amp plug. 
 

I chose to make my own extension cords that go from the controller
box to each set of lights.  I buy the wire in bulk, 1000 foot spools.
It is basically standard lamp wire, just a little beefier insulation.  It is
referred to as SPT2. 

1000' of SPT2 wire
 

I cut the wire to any desired length and attach
a 'vampire' plug to one end.  This type of plug is super easy to
connect.  Slip the wire in a groove, slide on the top and two little
fangs pierce the insulation and make contact with the copper wire.
You can also use the normal everyday extension cords that are sold
at any store.  They say indoor use only, but I've never had any
trouble using them outdoors for the short amount of time I need them.
You can use these instead of making your own, just cut off the
appropriate plug end and you're done.
 

Male and female vampire plugs

Close-up of a vampire plug.  Note the little fangs.

Please contact a qualified electrician for all your electrical needs.

Now that you have the hardware, synchronized a song or two,
and have your electrical needs all in place, it's time to hook it all up.
When you buy your hardware you will also need to get a connection
for your computer.  I chose the USB adapter with booster. 
From the USB adapter I run Cat5 cable to the first controller and
daisy chain more Cat5 cable to each additional box.  Now all the
controllers can talk to each other.  Since my controllers are spread
around the house I bought premade 50 and 100 foot lengths of cable.
 

Since I chose to synchronize to music there had to be a way for
visitors to hear the music, otherwise it's just a bunch of blinking
lights.  I bought a low power FM transmitter.  This is a legal way
to broadcast music over the FM channels.  I found an empty
channel (107.1), set the controller to that channel and now visitors
can listen to the music from the comfort of their cars.  I also chose
to play the same music in the yard.  I put a radio in the garage,
tuned it to 107.1, placed some outdoor speakers in the yard and
now people walking by can listen as well
(albeit at a low non-neighbor disturbing volume).

FM transmitter
 

Now the big question.  Where can I get all of this stuff?

Hardware/Software	Light-O-Rama
Circuit Breakers	Your local home improvement store.
20 Amp GFCI	Your local home improvement store, but you'll pay a lot.  I bought mine on ebay for less than $4 each with shipping.
20 Amp Plugs	Your local home improvement store, but you'll pay a lot. I bought mine on ebay for $2 each.
Wire	Home improvement stores sell it by the foot or on 250 foot spools.  You can try electrical supply stores. But for me I buy mine online.  I've used Action Lighting or Creative Displays.  Action lighting has SPT2, but creative displays is SPT1.  My new source for wire is Americord.  I highly recommend them, be sure to call and get the bulk rate though, you'll save a lot.  This year I went with Christmas Light Show.
Vampire Plugs	I've only found these online.  Action Lighting or Creative Displays has them in different styles (male or female) and colors.  I also went with Christmas Light Show for these too.  Home Depot sometimes puts them online too.  They refer to them as slide-on plugs.  The very cheapest I've found, but you'll need to buy 100 at a time and they sell out quick.
Cat5 Cable	This can be found almost everywhere.  Since I needed 100's of feet I went online.  I got mine from a place called Cables For Less.  You can buy different colors and lengths and the prices are very reasonable.
FM Transmitter	I chose the Ramsey 25B FM transmitter, but there are others out there.  It comes in a kit where you have to solder everything together.  If you have no knowledge of soldering electrical components I suggest you buy a prebuilt one.  I got mine on ebay for just a bit more than the cost of the kit.
Weatherproof Enclosures	My original enclosures that I modified came from Home Depot.  They are sold as water sprinkler timer enclosures.  Cut out the guts and the controller card fits nicely.  Light-O-Rama now sells custom made enclosures for some of their controllers.
Lights	The best place to buy lights are your local stores - Wal-Mart, Target, K-Mart, home improvement stores, etc.  Online light prices do not compare to their prices.  But occasionally you will need to shop online for certain lights.  In my case the C9 bulbs that I use.  The stores typically don't sell single color C9 strands and when you need to replace just the light bulb it's best to go online.  I like Action Lighting and Creative Displays for their bulk bulbs.  If you need 500 or more bulbs of a single color, then that's your best bet.

Then there are the special projects I have that are more
than just strings of lights.  The projects are things
I've made to add a little something special to the show
or to make it easier to hang the lights.