Picked up a set of Diamond Group LED step lights... first round was not so good but the second set I received from them after a phone call was a keeper:
These are basically stick on LED strip lights but we have wrap around step rugs. So I had to get creative with mounting and use some aluminum channel to stick the LEDs onto and some standoff nuts to mount the channel to the step:
This last shot of the step in the folded position gives an idea where I mounted the LED light strips:
Overall this provides light on each step without being too bright. Probably the hardest part was figuring out how to route the wires to allow folding/unfolding the steps without pinching the wires.