fxguide has a good interview up with John (DJ) Des Jardin, VFX Supervisor for the new Watchmen Film (opening today). Specifically, they talk alot about the techniques used to create Dr Manhattan.
Instead of creating a character from scratch, we got to take a main character in the story who had to emote with the other characters, so the idea of shooting an actor in place and replicating him in CG was where we started. The unique thing about Doc is him being a light source which was challenging for the shoot and required a lot of R&D to have the environment react properly. First and foremost we needed a performance, so we had to have the actor and cheating didn’t seem the way to go, so we had to figure out a suit. The result was a distributed packing of blue LEDs with a remote power source. Global Effects Inc built the suit for us and it has about 2500 LEDs on his body, gloves. He looks like he’s in Tron.