Are LED Lights allowed in regular Vex competition?
If you use these LED lights, http://www.vexrobotics.com/276-2176.html, then yes they are legal. My team uses them all the time.
You can also use LED strips/LED lighting on your robot provided you power them of the cortex without an external power source/battery supply. There are a few of Q & A ruling relating to this but I could only find one of them.
Basically they are legal if they are considered non-functional decorations. So no blinding your opposing alliance with super bright LEDs or something