This design is based on the Rotary Encoder LED Ring Breakout Board by Mayhew Labs. I used 1 × red, 1 × green, and 1 × blue to make this RGB Controller. You also need 3× Rotary Encoders - I used these from SparkFun which are inexpensive and work. I cannot really recommend them though - they feel kind of cheap when you rotate them and they have only 12 steps for a 360° rotation, which is not enough! I also do not like the potentiometer knobs from SparkFun - I need to find better knobs.

Count Part Cost
1 Rotary Encoder LED Ring Breakout Board - Red $16
1 Rotary Encoder LED Ring Breakout Board - Green $16
1 Rotary Encoder LED Ring Breakout Board - Blue $16
3 Rotary Encoders $9
3 Potentiometer Knob $3
1 USB Boarduino v2.0 $25
Breakout Board Pin
GND GND GND GND
VCC 5V 5V 5V
ENCA DIGITAL 2 DIGITAL 4 DIGITAL 6
ENCB DIGITAL 3 DIGITAL 5 DIGITAL 7
SWITCH DIGITAL 8 DIGITAL 9 DIGITAL 12
SDI Green SDO Blue SDO DIGITAL 11 (MOSI)
CLK DIGITAL 13 (SCK) DIGITAL 13 (SCK) DIGITAL 13 (SCK)
LE DIGITAL 10 (SS) DIGITAL 10 (SS) DIGITAL 10 (SS)
OE GND GND GND
SDO   Red SDI Green SDI

The code is based on the example code on the ledRings Arduino library on google code.