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For an eye-popping introduction to the future of lighting, walk into the lobby of Philips Color Kinetics' headquarters outside Boston. The reception area is bathed first in pink, then lavender, then pink again. Hallways on either side undulate with a tunnel of pulsing blue, then purple, lights. The surrounding walls display Philips' latest products as they have been installed in a rotating selection of buildings, including the CN Tower in Toronto and Harrah's casino in Atlantic City, N.J. All this lighting is done with light-emitting diodes, or LEDs.

The energy-hogging incandescent lightbulb as we know it got a death sentence when President Bush signed the Energy Independence Act in December 2007; most such bulbs will be phased out beginning in 2012. Europe is nixing incandescents beginning in 2009. The race is on to develop devices that do a better job of converting electricity to light. Compact fluorescent bulbs have become a popular alternative, but LEDs have the potential to be twice as efficient. They typically last 50,000 hours, compared with 10,000 for a compact fluorescent and 1,000 for an incandescent bulb.

The hurdle so far is price. LEDs, semiconductor diodes that light up when current runs through them, are 10 to 20 times as expensive as incandescents, too high for use at home. But the Department of Energy predicts that steady improvements in semiconductor manufacturing will bring the price of white LEDs below that of compact fluorescents in five years. Large consumers of electricity see a quicker payback. Wal-Mart Stores (nyse: WMT - news - people ) and Shaw's have begun putting LEDs in some freezer cases. Lansing, Mich. is testing LED street lights. "The consumer is the last to convert," says Charles Jerabek, chief executive of Osram Sylvania, Siemens (nyse: SI - news - people )' North American lighting division. LEDs account for only 12% of the unit's $2.5 billion in revenue, but it's the fastest-growing piece.

At Osram Sylvania labs in Danvers, Mass. researchers are experimenting with blankets woven with LEDs to treat babies with severe jaundice. They're also developing LEDs for use in endoscopic surgery to replace the xenon lights currently in use, which are bulky and don't last long. Another innovation: square tiles of light that could replace fluorescent office ceiling lighting.

Twenty miles away in the showroom at Philips Color Kinetics a "screen" made of 50 vertical tubes (each 2 inches wide and 4 feet tall and composed of 760 individual diodes) of programmable LEDs projects a parrot moving in a forest, then flames flickering in a fireplace. By feeding video input into a computer, Philips makes the LED tubes function as a low-resolution video screen. Since LED lights can be tuned to different wavelengths of color, Philips is also working with retailers of luxury goods and jewelry to choose the best color for showcasing each product. Diamonds look best under blue-tinged white light, while gold shows better in warmer tones.

ElectroniCast Consultants of Upper Lake, Calif. says the market for LEDs in lighting should grow to $1.4 billion in 2009. "As the price continues to drop and the performance continues to increase, we'll see more adoption," says Philips Color Kinetics' vice president of innovation Kevin Dowling. "We haven't scratched the surface of this technology."

MUMBAI, NOV 27 - Sharpshooters and Indian Army commandos launched stakeouts across the heart of India's financial capital on Thursday, trying to rescue hostages trapped in luxury hotels and other locations after a series of brazen gun-and-grenade attacks that left at least 101 people dead.

The special forces teams went room-to-room in the five-star Oberoi hotel to rescue 25 hostages, and police launched a fresh offensive to sweep out gunmen believed to be still holed up in the iconic Taj Mahal Palace and Tower hotel.

Two explosions on the top floors of the Taj were shown live on Indian television , while the Oberoi's 18th floor was engulfed in flames. As the commando teams removed the hostages, helicopters circled overhead and crowds of onlookers cheered from the street below. Five gunmen were reportedly still inside the hotel. Earlier, at least four dead bodies and a trickle of hostages were taken out of the Taj--a castle-like, 1903 landmark that was set on fire during the attacks and has been transformed into a smoldering symbol of a city under siege.

Eight Israelis were being held hostage at a Jewish outreach center, officials said, including a young rabbi and his wife. Their condition, and the total number of hostages trapped in or rescued from the hotels, was not known.

"We can say, this is the worst most brazen attacks in Indian history because people were shooting openly on the street," said police official A.K. Sharma. He was speaking at the funeral of a popular police inspector, who was killed Wednesday night while trying to stop gunmen who were attacking at the train station. "It's a violent situation that's still ongoing. Mumbai remains at war."

With the attacks stretching into their 16th hour, Prime Minister Manmohan Singh condemned the terror strikes in a nationally televised address Thursday afternoon. Some news channels split their screens to show both the prime minister speaking and the ongoing battle between security personnel and the terrorists.

Singh said the Mumbai attacks were "well-orchestrated" by terrorists, who chose well-known and high-profile targets. The prime minister called for creation of "a central agency" to investigate terrorism in India, where some 44 bomb blasts in seven different cities have killed more than 150 people since May.

As the sun set, some hostages unfurled "Save Us" banners from the windows of the Taj hotel, across from the Gateway of India monument and Mumbai's waterfront. Others climbed from upper-story windows using bed sheets tied together as ladders.

Authorities said more than 300 people were wounded in the highly coordinated attacks that started 10:30 Wednesday night. In addition to the five-star hotels, bands of masked gunmen armed with assault rifles, hand grenades and explosives attacked a popular café packed with tourists; the historic Metro Cinema; a crowded train station; the Chabad-Lubavitch Jewish center and a hospital.

In one case, a police van was stolen and gunmen opened fire in the street indiscriminately.

At the Jewish center, five rounds of shooting were heard Thursday and a grenade was thrown, said army officials who were surrounding the site and launching a rescue effort.

Despite the recent wave of bombings in India, Wednesday's assaults were seen as unprecedented, authorities said, in terms of the open, coordinated effort to lay siege to well-known symbols of India's prosperity and to places where Westerners gathered.