Adding PWM dimming on some sort of timer would probably finish out a "fire" effect with LED's, at least IMO. The on/off in one display I saw still looked pretty decent, but having the lighting dim in and out would probably make it look about as realistic as possible, at least with LED's.

Not nearly talented enough to do something like time PWM, but I've played around with PWM on LED's, and I would think it could be used to great benefit for the fire effect.