What is needed to connect Arduino to a Loconet network?
And from the software part, you can use MRRWA (Model Rail Roading with Arduino) libraries. Last version can be downloaded from their site: http://mrrwa.org
With those libraries you will get lots of interesting demo programs like a Loconet Monitor, a Throttle, a Control Panel or a Fast Clock among others. And with simple programming you will be able to make your own.
Check all information about the shield in this post.
Make your own command station with Arduino for 8$
Check this post to build your command station with Arduino. No soldering is required, and it will cost just 8$.
Loconet Outputs and Sound Module with LNCV configuration
Version 7.0: Go to THIS POST to see information and download software about version 7 of the sound and outputs module. This version has many improvements like independent volume configuration for each sound and background/main sound configuration.
Version 6.2: Go to THIS POST to download and check all functionalities. You can upload as many sounds as you want, assign each of them to an output number and play them through your throttle or software, and assign them to events in the layout like train arrivals or departures.
In this post you will find information and a link to download a program which converts your Arduino in an outputs and sound Loconet module. That's one of my firsts running projects and first version of this module.
Illumination system for your layout
Version 1: In this post I describe how to make an Art-Net receiver to manage some led strips to bring your layout to a new level, and have an ambient illumination and weather simulation worthy of Miniatur Wunderland. It's not necessary the Loconet shield for this module, just an arduino UNO, a cheap Ethernet shield and a 4 MOSFET board to drive one RGB led strip and one white led strip.