I love this project and am going to attempt something Similar but probably with an arduino or atmega. I have two suggestions regarding the problems ive seen a lot of you have.
1 Batteries - There is no reason your batteries have to be mounted to the board. Take your batteries off the board and mount the battery holders around the rim of the wheel. If you do that centrifical force becomes irrelevant and you can run as many colors and diodes as you want. You should also consider surplus cellphone batteries theyre all over ebay cheap.
2. Power overall - You already have a spinning wheel going through a magneticfield.... thats a generator. A wire loop buffered through capacitors could recharge your batteries as you ride perhaps? (It might be too spikey etc)
3. Data transfer/ storeage - if you interface a bluetooth (or ethernet chip) you make it wireless. Use volatile ram and you can load the image from a cell phone on the fly. Use bitplanes (as they used to in the first pc's at least) . I know nothing about interfacing dynamic ram but its certainly megafast. The only downside of this is you may have to upgrade your MCP or mount a second one just to handle memory etc.
Just ideas. Im hoping to design a car wheel pov using an arduino with bluetooth and dynamic ram (I hope!) to have a 256 or more color dynamic display pov. The work here is a huge inspiration.

