Here's a sample of a retro he did for a 300zx as well as something very similar to the lude above on a 350z. Some of the stuff is really clean, I just think he gets a little happy with the LEDs sometimes (not shown here)
The website should have more info, but you've gotta have an account for that...
I highly doubt theres a bulb in the projectors. Look at the first pic I posted, it's in the exact same spot as the picture in the first post, just a different angle. I don't think he turned the running lights off and turned on another light in between the shots.
An LED wouldn't be put in the projector itself, per say, but strategically placed to get the affect of the modded demon lamps in the pictures I posted. The two lights, however, may be reflection--I've seen a similar reflection before.
That being said, RedLude98 said he'd installed LEDs as running lights, so it is possible. You can do all kinds of stuff, though, so I highly doubt it's photoshopped. Possibly an overall reflection, or a filter/lens issue with the camera.