Steps 1-4 only need to be done the first time you use a new computer
Install Arduino IDE and ATtiny85 drivers. This must be done by admin. Fill out a Helpdesk ticket if you need this. (admin instructions below)
Goto File >> Preferences and add "http://digistump.com/package_digistump_index.json" to the Additional Boards Manager URLs box, then click OK
Goto Tools >> Board: "XXXXX" >> Boards Manager. Note "XXXXX" will be the name of a board such as Arduino Uno, but it doesn't matter what it is now
In the search box type "digispark" and click the install button for "Digistump AVR Boards by Digistump"
Goto Tools >> Board: "XXXXX" and select "Digispark (Default - 16.5mhz)
Copy the code from below into the IDE
Upload before connecting the Lilypad. Either hit the Upload button (arrow button in the upper left), click Sketch >> Upload, or press Ctrl + U
Once the IDE says "Plug in device now..." (see orange below), plug in the Lilypad with USB cable and code will upload.
Blink Code
Here's the basic code to make the built-in LED blink rapidly:
#define LEDPIN 1
void setup()
{
pinMode(LEDPIN,OUTPUT);
}
void loop()
{
digitalWrite(LEDPIN,HIGH);
delay(100);
digitalWrite(LEDPIN,LOW);
delay(50);
}
Here's what I did to get these to accept a program.
This appears to be the same directions but in an easier to understand format. That said, I only skimmed these and have not tried them.
Finally, here's a video of getting it going: