1) This is amazing?! Can I do this on my Wii / PS3 / 360 / Atari...?

No, as it uses the light bars on the PS4 controllers it will not work on any other video game system (except possibly PS5, I have not tested. See #2)

2) Will this work on PS5?

[From a fellow gamer with a PS5. If anyone else notices otherwise, let me know] Partially? It appears that on PS5 it only shows 1 colour on ALL 4 controllers vs. different colours on each controller. =(

3) Do I need to use an iPhone? 

You don't need an iPhone. You just need a camera that is _VERY_ low latency. (The time from when it takes the video, to when the computer gets it). Have you ever used you webcam, and whenever you do something, there is a delay before it shows up on screen? That's latency. Those people that play rhythm games all the time can easily notice if something is out by 40ms, and your average person can easily notice 100ms (0.1s).  

Also, you need to be able to adjust the settings on the video feed. Adjusting the shutter to a REALLY QUICK shutter speed, eliminates a lot of the "noise" from around the light. 

I bought a Playstation Eye camera to use for it, however was having issues finding software to adjust the settings. But any low latency camera, that you can adjust the video input on, would work. 

4) I have newer guitars that use a Controller spot. (non dongle) Will this work?

Great question. I don't know... This is my setup:

4 DualShock Controllers (hooked up wirelessly) 
2 - 2 Controller Chargers (hooked up via USB to charge)
1 - RockBand USB Hub
1 - 2 Guitar Dongles (1 /w 2 USB ports)
1 - RockBand MIDI Adapter (Drums)
3 - USB Rock Band Microphones 

Now, DualShock controllers CAN be connected wired. So possibly if you connected 2 wired, you could then add in your 2 non-dongle guitars. 

5) Why does it go really fast sometimes, and really slow sometimes?

That's intended. Just like a real concert, you don't have lights going crazy in a slow part of a song. The light bars are showing the actual lighting changes from the stage lighting in the game. Which on MOST songs follow the song tempo / mood quite well. 

6) Why did you use a camera? Why not just pull the HID data directly? / Why not use a _____ to read the LED voltages from the LEDs in the controller to get the raw data?

Both of those ideas would totally work. It's just one of those cases of... 20% of the work fo 80% of the gain. I'd have to do a lot more work / research / programming to get the HID data directly. And well, as for reading the data directly from the LEDs... I'd then have to take apart 4 PS4 controllers, solder connections. (build a connector on them somewhere, as I'd want them to be able to be used for OTHER games). Also at this point, my soldering skills aren't that fine tuned yet, those boards have some tiny connections. 

Also, some of those tools for the HID reading need to do the controller feed over wired. I'm not sure if you could have 4 controllers wired, along with all the other devices?

Are you a programmer? I wouldn't be against getting rid of the camera, if you had the chops... ;)

7) What's this LightJams software?

LightJams is interactive lighting software... You could even do things like use a Kinect or Wiimotes to change the LEDs on a massive LED wall. Check out LightJams.com for more info. There is a free trial (that just pauses for 30 seconds every 15 min). What version you would need depends on what kind of lighting you install (how many channels it uses) but chances are you'd be fine with the cheapest version.

LightJams is able to sense the colours / hue / sound, etc, and then adjust the lighting dynamically. So the options for what I can do light show wise is pretty much limitless. It's not JUST taking the colours of the light bars and showing it on the lights.