The lights are Crazy Lights from ledlightshack.com
I started with their complete system, which includes the controller and 2 strings:
http://ledlightshack.com/12V-LED-Crazy-Rope-Lights-Complete-System-P2711640.aspx
After that tested well, I bought an additional 4 strings:
http://ledlightshack.com/12V-Crazy-Lights-5050HCL3012V-Lights-Only-P2711646.aspx
and 2 additional 6amp power supplies:
http://ledlightshack.com/6-Amp-Power-Supply-110VAC-to-12VDC-P4072614.aspx
My wife created power extension cords to run to the later strings, so they powered fully.
Typically you put these on crown molding, but to match my arcade we used metal U shaped trim, 1" diameter, from home depot. They were big enough to hide the leds and power wires, so that only their reflection was on the ceiling, giving that cool effect.
I tested distance from the ceiling, and I found it was best to keep them tight against the ceiling, as too much light across the ceiling began to reflect in the pinball glass. How I have it in the video creates no glare.