[mike31154]

Type of heatsink & whether a fan is required largely depends on the type of LED you choose. With the commonly used 3 watt star LEDs most folks are using fairly solid chunks of aluminum as heatsinks with no fan, although I've seen the odd build with lighter aluminum rails. It boils down to how comfortable you are running the LEDs of your choice close to the hotter side & risk burning them out.

My DIY is similar to SeaHorse Fanatics using 10 watt multi chip emitters. It uses individual heatsinks each with it's own fan. The heatsinks are mounted on light aluminum angle stock. Link to my DIY LED build is at the bottom of this post.

I've recently ordered a 5 meter reel of 5050 SMD LED strip lighing to play around with, mainly as possible supplemental lighting and for other uses around the house. They have 60 LEDs/meter providing about 780 to 900 lumens per meter. Run on 12 Volts DC and can be cut at every 3 LEDs if you wish, without affecting the voltage required. Less than $20 from some fleabay vendors for the 300 LED version. If you want to spend a little more, you can score a 5 meter reel of RGB with wireless colour controller & power supply included. There are also waterproof versions. I think RuGlu6 uses something similar in his current LED build, but I'm not sure 5050 SMDs have sufficient penetrating power for most reef tanks. While browsing what's available, I've noticed that you can now get 5050 SMD LED reels that have a double row of emitters, but the price goes up accordingly. Would be a simple solution since the reel has sticky tape on the back & you can cut to the length of your choice (as long as it's in the proper area every 3 LEDs), stick it on pretty much anything & run it with a simple 12 Volt DC power supply. I suppose if you stick a bunch of these close enough together, it would be an ok solution for a FOWLR or maybe a softie tank.

Realistically, if you're going to switch to LEDs, go all the way. This means your going to have to add at least one '0' to your $40 budget, & the 4 will likely need to change as well.