I started out by taking a ping pong ball and drilling holes all over it with a 1/16" bit, the smallest in my set. I used a 3/16" bit to make hole for an LED and I spray painted the ball black to avoid having the ball glow. To test it out, I wired up a quick LED circuit and when I went into a dark closet it was clear that 1/16" was too big of holes--the light was not near focused enough on the ceiling, and it'd look even worse in the baby's room. I started over with a new ping pong ball and used a hot sewing needle to poke tiny holes and got closer to the look I wanted.
The most frustrating part of this project was when I tried to package it up. I used a small Sparkfun box as a case, and once I put everything inside the box I realized that the wires I was using from the PCB to the LED at the end of the servo arm were way too thick and there wasn't enough give. The servo was straining really hard and not moving much, so I reduced the swing range to only a few degrees, but that still didn't fix it. I had to cut out that wire and use the thinnest I could find, which was some wire I snipped off of a spare battery holder. It works...but I may decide to start over with the whole enclosure (maybe use this as a chance to try out a laser cutting service) and use thinner wire yet so that it works more like I'd initially planned.
The picture here is a longer exposure, so its fuzzy because of the movement, but you get the idea of how it looks on the ceiling. The source code is very simple, but it's available at https://sourceforge.net/projects/babystarlights/. The project didn't turn out quite like I'd planned, but it's tons of fun to see my daughter staring at the lights and following them as they move around the room, and my wife even asked to help me solder it. My camera wouldn't pick up the light on the ceiling, but here's a quick clip of the light in action.