In regards to my original question, I may not have been clear.
I already have an array of LED's "drawing" a shape, but it's not sufficient. Imagine you had a character - let's say the letter 'A' in a specific font - that you wanted to light up. You could use a bunch of LED's to "draw" it the way you want, but going a step further and actually cutting that letter in that font out from a piece of opaque plastic, and then filling in the cut-out area with some sort of light diffusing material (think - something like hot glue) would make the character appear might higher quality in the actual font and format you want, not just an approximation.
This is for a commercial design and the quality of the illuminated characters is the main focus of the project so it has to look good. I've dissected a few 7-segment displays and they use this same technique, a 'riser' with cut-outs and a diffusion material (some sort of epoxy) filling the cut-outs.
I'll give the film mentioned above a shot - but if there's any more ideas on materials that would offer good diffusion, I am all ears. I found these guys:
http://www.micro-beads.com/Products.aspxthey are size-controlled acrylic spheres that are specifically designed for light diffusion and matting. I had thought of trying those, mixed in with a clear epoxy which would then be put into shapes cut from an opaque piece of plastic using a laser cutter. But bead-blasting media is also little acrylic spheres and available locally for a few bucks per pound. You can also buy retroreflective microspheres (the stuff that is added to paint for street signs to make them so reflective). I thought maybe adding those to clear epoxy would do the trick also. Or maybe some other kind of pigment/diffusion media to clear epoxy. Just figured rather than embarking on weeks of expensive testing, someone might have some experience and know what works.
The GE film is a good start, I'll give it a shot. Any other ideas welcome.