There are many different types of LED based on the chemistry of the substrates in the device. There are several ways to make 'white' light: mainly, either run the photons emitted by the LED through a phosphor coating, [similar to fluorescent tubes or CFLs]. Or to mix the emissions from three or more diodes of primary light frequencies, [yellow/green, red and blue for light, as opposed to the paint primaries we learned when daubing at first grade], to create a 'white' light. The percieved 'temperature' can be adjusted by changing the frequency of the photons emitted, to give 'warm' or 'cold' white. The problem is balancing the emitting power against the temperature of the device when running, because the life deteriorates exponentially with temperature. Don't confuse working temperature with power-loss inefficiency. The working area in the LED is very small, say 1mm2, and it's hard to get the heat away from that small spot.
In practice, the outut from individual units is presently so small that they are most often fitted in multiples. Switching out some of the lamps is then probably the easiest way to create mood lighting effects. Colors are true, as Greg says, because the frequency of the actual light emitted can be controlled electronically.
The problem with all these 'high tech' light emitters is percieved color of the 'white', deterioration in brightness over the lifespan [L50] and cost effectiveness. Manufacturers 'get away' with low brightness, because humans compensate for low light levels so well. A 50% drop in output [ one 'stop' to camera buffs] can be compensated by the eyes and brain so well that we barely notice. Except when we need the brighness for fine work or reading, when the opening of the iris to let in more light interferes with focus and ability to see detail.
Here's a good article:
http://en.wikipedia.org/wiki/Light-emitting_diode
