geez a picture is really worth a thousand words....
so what's the easiest way to achieve the above results in a typical "square box" room... I guess framing out along the top of the walls to simulate a recessed ceiling? I haven't done my homework yet but am just looking for a kick-in-the-butt to get me pointed in the right direction.
or you can use regular crown and rope lights, In that case you will need to cut blocks out of 2"x2" with an angle to match the crown and place them at each stud. 45 the corners since the top of the molding isn't supported. You will need a power source so you may need an electrician.