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An RGB LED is a LED which has three LED’s integrated in one packaging. These LED’s have the colors Red, Green, and Blue. The RGB LED used here is a hyperflux LED with common cathode, which can draw 20mA current. Such a LED costs about 2€. With these three colours you can mix to any colour.
When using 8-bit PWM a number of 256 * 256 * 256 combinations can be made, thus the LED can show 16.777 million colours, and 256 different brightnesses. When all the three LED’s are at full brightness the color will be white. When they are all off the color will be ‘black’ in the dark ;).
Read more: RGB LED color mixer