I finally watched the closing ceremonies yesterday (did not see them while at Burning Man, obviously.) I liked the blinky balls that the children and audience members had, and the sense that the flame lit the LED ball. But it was just manual, people pushed buttons.
It occured to me it would not be too expensive to make an LED blinky that worked a bit like flame. While it was on, it would transmit a particular signature code in its blinking. If another blinky got close enough to see this brightly enough, it would detect it and turn itself on for some period of time. You could tune the range, it's just a photoresistor.
That way they could "light" their neighbours the way a flame does, and the flame would pass along. With the range tuned to a few feet, the lighting would have propagated through the audience at some speed (you could define what the speed would be.)
This would also be a fun rave/party favour. You might be able to light your own or you could light from somebody else. Perhaps after too long alone the blinky would go out and need to be lighted from somebody else's, encouraging socialization.