Battery insert, with a tapped hold to hold the cover in place. (From what I've been told, the originals just had the battery kinda "stuffed" into the grip.)
On mine, the battery is as you say, just stuffed into the grip. The battery cover is just press-fitted into place. I would put a strip of Scotch Tape, or electrical tape on mine to make sure it stayed in place. Mine also uses bulbs from Christmas Tree light strings, so you can pick your color. I believe they later switched to LED bulbs.
The holographic film, I think it used to be called refraction tape, was once very common in auto parts departments in stores and in auto parts stores. Some people would cover their rear bumper with it, and it would blind you when the sun hit it while you were behind them.