RGB^3
A few more comments that may help put things in perspective
would i use a potentiometer to control the intensity levels(dimming levels) to form unlimited colors.... Would i need 30 x 30 x 3 potentiometers if so?
No. It's an imperfect analogy, but think of an etch-a-sketch where you have to carefully tweek the knobs to draw a picture (x2700 knobs). To draw a new picture, you have to erase the slate and start over. You want a dynamically variable means of adjusting LED intensity, example methods being digital-to-analog (D/A) converters or pulse-width modulation (PWM). Either way, you're looking at a lot of hardware :shock: .
Suppose you had Black-to-White LEDs. To display a monochrome image, you'd want at least 6 bits of resolution in the D/A. For RGB, you can skimp a little on the red and blue (red, blue and green all contain some luminance information, but green contains the most). So maybe a 6-bit D/A (or the PWM equivalent) for green, and 5 bits for red & blue.
Multiplexing could reduce the number of necessary PWM generators (it's all part of the same concept, timeslicing), but only to a limited extent, as RGBrainbow pointed out.
It's a nice idea that sounds simple, but would be difficult to implement in a practical manner using standard LEDs and off the shelf controllers.
//Edit - though it's probably doable with fast 6-bit D/A converters. Three FAST 6-bit D/As could be fed intensity data in real-time to handle a 30 x 30 LED matrix.