Also (I don't know if this is correct or not) I've heard that drivers are needed also because LEDs provide no resistive load in a circuit, and its on the driver to provide that. Otherwise, turning on the light switch would be like hooking the black and white wires directly together in a circuit -- it would trip the breaker or blow the fuse.
Okay, as somebody who's actually wired up LEDs the old fashioned way...
1. Yes, you need a 'driver', though they're a lot less complicated than the ballast on a florescent light.
2. LEDs DO provide resistance, otherwise they wouldn't be consuming electricity. Yes, the driver still has a job to do.
Okay, LED driver construction, and why they really shouldn't fail that often:
First, on why the driver needs to provide resistance: It's because LED resistance DROPS as they get hotter. Which means that they'll consume more amps, go over their watt limit and burn out. So you put a resister in the circuit of appropriate resistance, and it acts as a current limiter to protect the lights.
Put an actual current limiting power supply on the circuit and you don't need the resister, which is good for power efficiency if you're trying to maximize it. More expensive up front though.
That's all that a LED driver is, really, a current limited DC power supply.
LEDs are diodes - that means that electricity flows in ONE direction through them. You can make really cheap christmas lights by putting enough LEDs in series such that their breakdown voltage exceeds 150V(if you want the lights to last) or 120V(if you don't). The light will actually end up being on at 60hz about 25% of the time, so say hello to flicker.
So step 1 is a bridge rectifier - so you're feeding the LEDs a half wave. They're now blinking at 120hz and on 50% of the time. Flicker problem solved for most people.
But that's not really all that efficient for lumination, as you have to stay below the safe voltage for the LED, so you're not getting all you can out of them. Slap in a capacitor to keep the voltage stable and you're now 50% done on the power supply.
After that, all you need to add is maybe a transformer(a lot of fixtures/lights will get around this simply by having the right number of LEDs in series), as well as a voltage regulator(for long life) and a current limiter or resister(to keep the LEDs from burning out).
A lot simpler than a ballast, the real trick is fitting all the above into the base of a light for less than $1.