Thanks Galaxy, that sounds like it will be a good option. There are some small and cheap RFID tags on ebay. I just need to find some relatively cheap RFID sensors (around $10 USD if possible) that can be used to switch the LED's lights on or off.
I want to create senors that turn some LED's on(or off) when a small magnet comes close (2-6 inches). I want to create these sensors for a laser tag like game only with Nerf Vortex disk guns with a small magnet embedded in the disk. The magnet would probably have to weigh no more than a penny...