The Fretlight is, for all intents of making music, a NORMAL guitar. Thus, you can plug it into an amp and jam with or without it being connected to your computer.
The LED Light System, however, does require the Fretlight Cable to be plugged in to a computer to operate. The Fretlight Cable (8-pin to USB) actually feeds both electrical power and information from the computer to drive the light system. There is no internal power system to light the LED's otherwise. The moment you unplug the USB cable, the lights go out.