Based on his comment in the video, I think he is doing the following:
He notches the outer rail (two examples shown above) making tiny "islands". When a truck rolls by, the metal wheels and axle conduct to complete the circuit to the LED(s). The LED power supply could be just a recycled DC wall adapter, cellphone charger, or whatever. Or track power could be used with a dollar or so of assorted parts like diodes and resistors. I'd think 3mm LED would work fine...on eBay they run about 10 for $1 with free shipping.