Make:

Here's an interesting article on Nanowerk about coating cotton yarn in carbon nanotubes (CNT) to make it conductive. While still a ways off from DIY use, this is an intriguing step forward for wearables! Looks like they could learn a thing or two about making a sewable LED, though. (Thanks, Sean!)

From the Maker Shed:

Lilypad E-Sewing Kit

The LilyPad e-sewing kit contains the bits to sew LEDs into any piece of clothing. Add turn signals to a jacket, accentuate a t-shirt, or light-up your favorite pair of jeans with this simple to use kit. This kit contains the very basics to the LilyPad system. It's a great entry-level kit for people who want to experiment with wearable electronics. Consider adding the LilyPad Pro Kit to extend control and use of the LilyPad system.

Features:

• 5 LilyPad Bright White LEDs
• 3 LilyPad Button Boards
  
• 2 Coin Cell Batteries 20mm
  
• 1 Coin Cell Holder
• 1 Spool 4Ply Conductive Thread