There are several ways to synchronize Christmas lights to music. Some are simple and some are very complex. Some are cheap and some are very expensive.
The easiest ones have built-in music which you can't change, and you just plug in your lights and use the pre-set programs which you can't customize.
We are using a great system, in my humble opinon, which allows us to pick the music and program our own light sequences.
We are using controllers from Light-O-Rama.
We also use the software from Light-O-Rama (LOR).
We program the sequences on a PC, which also runs the show. The PC is connected to one of the LOR controllers with CAT5 cable, then the controllers are all interconnected with CAT5 cable or simple telephone cable.
Sound could be as simple as plugging in some speakers.
We've gone a little better with an FM transmitter so visitors can hear the music on their car radio. The FM transmitter has a range of only a few hundred feet, so it doesn't interfere with commercial radio stations. There are many brands of FM transmitters available. Ours is a model FM25B from Ramsey Electronics. (2016 update: I just checked the Ramsey website and don't see any FM transmitters for sale there. However, it appears to be available from other resellers, plus there are many other manufacturers and models on the market that you can easily find.)
The Light-O-Rama (LOR) hardware and software allows you to set your lights to go on or off, fade in or out, twinkle or shimmer.
How do the lights change color?
Many of our lighting elements have multiple colors such as red and white. We simply put on one strand of white and one strand of red, then control each color independently.
The arches added in 2013 use the LOR Cosmic Color Pixels. This allows independent control of not only the arch, but of each individual light on the arches. The versatility of control and limitless colors convinced us to make this investment.
The RGB Mega Tree added in 2014 uses 16 strands of smart pixel strips with 50 pixel nodes per strand. This runs on an E1.31 network instead of LOR or DMX. Explaining all that is too much for this page, but you can look it up on HolidayCoro.com.
The lights on the upstairs windows were also changed to RGB in 2017. No longer constrained by white, red, blue (which looks rather green) and green (which looks rather blue). Changed all the icicle lights to RGB in 2018 too.
Each lighting element has to have its own extension cord from one of the controllers. With 80 channels of lights and some lights being 80 feet from a controller, we have about a half mile of extension cords.
LED or incandescent?
We use mostly the "old style" incandescent lights. The main reason is because when we started, the LED lights were much much more expensive and could not be dimmed. Dimming is an important part our show, so we didn't want to be stuck with only two options, on or off. LED light sets are now almost all dimmable, so future additions will be LED rather than incandescent.
How much is the electricity?
We have more Christmas lights glowing than any of our neighbors, but the added cost on our electric bill is worth it. It actually isn't too much, because typically not all of the lights are on at the same time, and many of the lights are on at much less than full power (25%, 50%, or 75%).
Do you want to do something like this?
Visit the LOR website.
Planet Christmas is another site with a lot of information, including how-to, blogs, and forums.