switching leds with relay on sensor wire

I believe he may be looking for a comparator circuit.

http://home.cogeco.ca/~rpaisley4/Comparators.html

The LED alone will draw ~25x more current the the transistor with the 10K base resistor.  If he is truely concerned about keeping the integrity of the signal in tact the transistor would be the way to go.

In most systems you could ignore a 25mA load, but on a signal wire there may not be enough current to drive the light directly and still transmit the data reliably.  Without more information it would be impossible to tell.  if it were me, I would be more comfortable with the smaller load, especially considering the parts are dirt cheap, and we arn't adding many components.

If the two states are necesarry, or even to simplify everything, just use a SPDT reed relay (I didn't know they made SPDT reed relays, I've never seen one).

Assuming a 12vdc control circuit: http://search.digikey.com/scripts/DkSearch/dksus.dll?Detail?name=PB283-ND

At 12vdc it draws 5.3mA!

Still not explained well.

If this thing is enclosed how are you going to add a sensor?

You could monitor the current draw from the battery, If there is a fluxuation then an LED can light up.

I'm not familiar with a Korg Kaoss pad, but it now sounds like instead of monitoring button pushes you're trying to monitor the movement of an alalog controller?

Much more information is needed here. 

There are too many unknowns for me to give you any information.  I would guess that hotwaterwizard is on to something with his advice about the comparator circuit. 

You will need to know exactly what each of the four wires does in order to interface with it.  If you can't tell us the function of the four wires then all we'll be doing is guessing, which is all we've been doing anyway.