DVD output to colour LEDs

Anything is achieveable, but I don't think what you have in mind is remotely affordable.

From what I can tell, you're trying to set up an audio-visual setup for a club or something that runs off a simple back end rather than something complicated, but also keep the costs very low, but because of that the only way you can really do it is with some very difficult jury rigging.

Trying to get a DVD signal (with its 720x480 pixel grid) to control one pixel (1x1) isn't a very realistic idea. It's possible in a vague sense with scalers, but is way too difficult to be worth doing. You could run a normal screen and put three (RGB) photosensitive diodes in front of it, and have the diodes control the brightness of a trio of LEDs (or even lightbulbs), but that would take proper electronics skills. You could find an old CRT projector that someone wants to dump and defocus it until you've mostly lost the image and are left with three mostly monochromatic lights, but the effect would be unlikely to look very slick.

In the end it'd probably be cheaper to work from the front end back. Take a standard, cheap display of your preference, and edit the video effects you want in advance using something like Final Cut or Adobe Premiere. It'll be both cheaper and ultimately quicker to do it this way.