Do they exist? Has anyone ever used anything like this before? Where can I get them?

i know i've seen edible jewels, i would try a google search, or try some of the big cake supply places.

http://fancyflours.com/red-ruby-cake-jewels.html

Aww man, the pink ones are sold out

check out Jeff Kinceallan at
http://www.jeff-the-chef.com/

Also, you can buy molds from First Impressions or Cakes by Sam and make your own.