 Loi Krathong
Loi Krathong takes place on the evening of the full moon of  the 12th month in the traditional Thai lunar calendar. In the western  calendar this usually falls in November.
Loi literally means ‘to float,’ while 
krathong  refers to the lotus-shaped receptacle which can float on the water.  Originally, the krathong was made of banana leaves or the layers of the  trunk of a banana tree or a spider lily plant. A krathong contains food,  betel nuts, flowers, joss sticks, candle and coins. Modern krathongs  are more often made of bread or styrofoam. A bread krathong will  disintegrate in a few a days and be eaten by fish and other animals. The  traditional banana stalk krathongs are also biodegradable, but  styrofoam krathongs are frowned on, since they are polluting and may  take years to disappear. Regardless of the composition, a krathong will  be decorated with elaborately-folded banana leaves, flowers, candles and  incense sticks. A low value coin is sometimes included as an offering  to the river spirits. During the night of the full moon, Thais will  float their krathong on a river, canal or a pond lake. The festival is  believed to originate in an ancient practice of paying respect to the  spirit of the waters. Today it is simply a time to have fun.
 
Governmental offices, corporations and other organizations usually  create big decorated rafts. There are also local and officially  organised raft competitions, regarding its beauty and craftsmanship. In  addition, there are also fireworks and beauty contests during the  celebration of the festival.
 
The origins of Loi Krathong are stated to be in Sukhothai, but  recently scholars have argued that it is in fact an invention from the  Bangkok period. According to the writings of H.M. King Rama IV in 1863,  the originally Brahmanical festival was adapted by Buddhists in Thailand  as a ceremony to honour the original Buddha, Siddhartha Guatama. Apart  from venerating the Buddha with light (the candle on the raft), the act  of floating away the candle raft is symbolic of letting go of all one’s  grudges, anger and defilements, so that one can start life afresh on a  better foot. People will also cut their fingernails and hair and add  them to the raft as a symbol of letting go of the bad parts of oneself.  Many Thai believe that floating a raft will bring good luck, and they do  it to honor and thank the Goddess of Water, Phra Mae Khongkha (Thai:  พระแม่คงคา).
 
The beauty contests that accompany the festival are known as  “Nopphamat Queen Contests”. According to legend, Nang Nopphamat (Thai:  นางนพมาศ; alternatively spelled as “Noppamas” or “Nopamas”) was a  consort of the Sukothai king Loethai (14th century) and she had been the  first to float a decorated raft. However, this is a new story which was  invented during the first part of the 19th century. There is no  evidence that a Nang Nopphamat ever existed. Instead it is a matter of  fact that a woman of this name was instead the leading character of a  novel released during the end of the reign of King Rama III – around  1850. Her character was written as guidance for all women who wished to  become civil servants.
Kelantan in Malaysia also celebrates the same celebration, especially  in the Tumpat area. The ministry in charge of tourism in Malaysia  recognises it as an attraction for tourists. Many people visit the  celebration each year.
Yi Peng
Loi Krathong coincides with the Lanna (northern Thai) festival known as 
“Yi Peng” (Thai: ยี่เป็ง). Due to a difference between the old Lanna calendar and the Thai calendar, 
Yi Peng is held on a full moon of the 2nd month of the Lanna calendar (
“Yi” meaning “2nd” and 
“Peng” meaning “month” in the Lanna language). A multitude of Lanna-style sky lanterns (
khom loi  (Thai: โคมลอย), literally: “floating lanterns”) are launched into the  air where they resemble large flocks of giant fluorescent jellyfish  gracefully floating by through the sky. The festival is meant as a time  for 
tham bun (Thai: ทำบุญ), to make merit. People usually make 
khom loi  from a thin fabric, such as rice paper, to which a candle or fuel cell  is attached. When the fuel cell is lit, the resulting hot air which is  trapped inside the lantern creates enough lift for the 
khom loi to float up in to the sky. In addition, people will also decorate their houses, gardens and temples with 
khom fai (Thai: โคมไฟ): intricately shaped paper lanterns which take on different forms. 
Khom thue (Thai: โคมถือ) are lanterns which are carried around hanging from a stick, 
khom khwaen (Thai: โคมแขวน) are the hanging lanterns, and 
khom pariwat (Thai: โคมปริวรรต) which are placed at temples and which revolve due to the heat of the candle inside. The most elaborate 
Yi Peng celebrations can be seen in Chiang Mai,[2] the ancient capital of the former Lanna kingdom, where now both 
Loi Krathong and 
Yi Peng  are celebrated at the same time resulting in lights floating on the  waters, lights hanging from trees/buildings or standing on walls, 
and lights floating by in the sky. The tradition of 
Yi Peng was also adopted by certain parts of Laos during the 16th century.
source: http://en.wikipedia.org/wiki/Loi_Krathong