I\'m thinking about making a physical controller (device?) with knobs, buttons, and LEDs. I\'d like to interact with it using Java (respond to the knobs, light up LEDs, etc)
Can you expand on your need for a custom device? It seems to me that designing hardware has a pretty high barrier to entry and that most applications I can think of would be better resolved by repurposing an existing piece of game controller hardware. If you really need new hardware, then i suggest you start by googling 'USB development kit' or 'USB development board' which will get you links like this, this and this.
As for working with USB hardware from Java, I've played around with the JUSB library a bit and it looks promising, but appears to be limited to Linux only because the Windows version of the native library half of the library hasn't been written. Alternatives can by found by googling 'HID java'.