Bioluminescince is amazing. I have seen it first hand barely noticeably in the wake of a ship at night, from a laboratory culture in a large flask, filling a Puerto Rican bay such that every fish darting or rain drop falling glows blue, and most recently in a 2 hour light show viewed through the window of the Alvin submersible on my descent into the Pacific ocean. I can tell you that it is always a crowd pleaser. The fact that microbes have generated biochemical pathways to produce light is amazing and awe inspiring. It may also, have some practical use for people, eventually. Picture streets lit not with street lights, but with glowing trees. Sounds like something out of Avatar, no? Or maybe straight out of a Margaret Atwood book - Oryx & Crake anyone? Well, it hasn't happened yet, but it might some day.
As part of an international undergraduate synthetic biology competition this past summer called iGEM (which might seem more like science fiction than science) young scientists from University of Cambridge made the first steps towards engineering bioluminescent trees. An article in New Scientist gives a nice overview the project.
Researchers took luciferase genes from fireflies as well as the lux operon from Vibrio fischeri and put them into E. coli . They then optimized the bacteria's coding mechanisms so that the E. coli over expressed the introduced genes, which translates into glowing especially brightly, to create genetic "BioBricks" that may be able to be used in the future to engineer other organisms (ie trees) to glow brightly.
The project's website is very slick, and does a great job describing the methods and goals of the research. There is a blog with week by week progress updates, good background information, and lots of pretty pictures.
To step back a few hundred feet, genetic engineering is a touchy subject, and there are arguments for and against it, that I have no desire to get into here (although if people wish to discuss in the comments, that is great). The fact is that biological engineering in one form or another already has a huge influence on our lives (the fact that your pet dog is no longer wolf-like is genetic engineering in a sense, just less directly, and on slower time scales). Where to draw the line is an important question, but one that I am not equipped or willing to answer. I do, on first thought at least, like the idea of streets lined with bioluminescent trees rather than street lights!