I found this article on Bit-Tech that describes how to build a rainbow LED circuit. I followed the plans and built a prototype circuit on a breadboard. The circuit works well, but I thought I could improve on it and I had some spare AVR chips left over from my Rotary Interface. I came up with a new design from scratch that only requires 1 chip, a few resistors and a crystal. Like all my AVR circuit there is an ISP jack for in system programming. The AVR controls the RGB LED's using pulse width modulation. With my design the RGB LED can produce about the same number of colors as a computer screen. Here is the completed circuit designed to power 3 separate RGB LED's.