LED or Light Emitting Diode is a special kind of diode. They share the same one way valve characteristics of normal diodes but have the main feature of making light.
LEDs are commonly used in low power situations because they are very efficient and last for a very long time.
Basic LEDS's come in different colours like red, green, yellow, blue and white. Fancier LED's include a forth pin that allows the LED to show any colour as an Red, Green, Blue (RGB) combination. Other high brightness LED's can be used for high efficiency lighting.