I'm currently totally at a loss as to how this effect is done: http://www.youtube.com/watch?v=zp8MHUNp7Cg
The glowing on the ship and the changing color. I want to do this effect in XNA 4.0 any hints and tips?
It looks like simple vertex colouring where the colour index is function of the distance to the centre of the ship, plus time.
This can be implemented using a texture storing a palette. It could also be done proceduraly if the desired colour gradients are simple enough.
If using a palette, the vertex shader would be something like this:
Edit: account for the fact that XNA doesn't support 1D palettes. If you still want to access the pixels of a 2D palette as if it was a 1D palette, see this question.