I'm sure it could be done in a regular guitar, though you'd destroy the tone.

You can get one of those LED kit to put on your guitar, which would work if you don't want any of the other functionality.

Not only that, but the idea of a guitar that "teaches" you with lights in the neck has been done before (see fretlight guitars, etc). The only new thing here is the iphone.

You can get natty little LED kits that replace the fret markers, but I've not seen anything more than that.