The festival is fantastic. Depending on who you ask, this is either "The Festival of Light(s)" or the "Fire Balloon Festival." The latter is more accurate, but doesn't begin to cover the carnival atmosphere or the sheer beauty of the balloons that are launched.
During the day they launch huge multi-coloured paper balloons in the shape of animals (birds are commonest, but elephants and others are also flying). These things are about six meters tall, and have a burner in a bottom hole that consists of what I think is tar-covered rope wrapped around a bamboo frame. It burns for a long time and is very hard to put out, even with several buckets of water. Every launch is prefaced with a great deal of dancing and banging of drums by the team. If the launch goes badly, things get even more interesting: one I saw didn't get enough lift and a breeze took it into the nearby power lines, where it immediately incinerated itself in a matter of seconds. The resident fire truck hosed down the remains (including the makeshift roof of the vendor shed underneath). But if the launch goes well, we have a huge beautiful animal sailing majestically up into the sky, where it creates a surreal sight floating over the gorgeous hills and monasteries of Taunggyi.