I want to make a vest that has LED all over it (for the purpose of night time cycling) but i want to be able to easily wash it.
Use metal snaps.
You could get some industrial velcro and sew it both onto the lilypad and the clothing. Some of the Thinkgeek screenshirts work this way: they have the loop-part on the shirt and the hook part on the hardware.
I have a Lilly Pad, along with several Arduino boards. I've been wanting to do some sewable/wearable projects but just didn't want to ruin the Lilly Pad on a mistake. So after reading Pulsea's instructable: http://www.instructables.com/id/Sewable_Arduino_Interface/ I decided to make a "fabric shield" for a regular Arduino. It's currently a work in progress, but here are some pics:
Take a look at http://speedvest.com/
it about a vest with EL wire from coolight.com showing speed of bycicle