Leah Buechley Kanjun Qiu* designed this hoodie at the MIT Media Lab using a LilyPad Arduino, power supply, LEDs, tiny speaker and iron conductive fabric.*
I've looked at a ton of light up garments, El Wire, etc. This is one of the most tastefully- and artfully-done articles of clothing I've seen as of late. Instead of hiding the electronics, the graphic on the back integrates, even highlights the main board.
Really well done, imho.
*Update: Kanjun Qiu (who appears in the demo video) actually designed and built the hoodie while she was an undergrad researcher in Leah Buechley's lab.
*Here's a good assessment of various types of conductive thread.