I developed a simple 3D raycasting engine (think really simplified DOOM or Wolfenstein 3D) that runs on an Arduino Mega. Although it could probably work on a weaker Arduino like the Uno, I would not recommend it.
Using the Wii Nunchuk as a controller, you can walk around the "3D" world. Currently I am developing the engine further to be used as an retro-styled racing game like F-Zero or Super Mario Kart.
It uses dimness of the LED's to control some simple shading and different numbers on an array that creates a map to create different colored walls.