Do faceted glass beads cast rainbows in sunlight like glass prisms do?
Yes and no. High quality faceted swarovski beads cast rainbows, as do preciosa Czech crystals, cubic zirconia beads and some fire polished faceted beads. Swarovski -the people who make those wonderful chandelier prisms -also make beads in a multitude of shapes and colors and all refract light the same way the prisms do. It's not enough to be glass, it must be a certain type of glass with a specific additive that makes light bend and become rainbows. Ordinary glass doesn't have that additive so it's not as good at making rainbows.
Fire mountain Gems has swarovski beads coming out the wazoo and they are my favorite supplier. They have bulk discounts, the more you buy the more you save. When you're like me and need over 2000 beads (I'm making an "installation" for a swanky art gallery) the savings add up. here's the start page for swarovski: http://www.firemountaingems.com/swarovsk... and beads specifically: http://www.firemountaingems.com/swarovsk...
When making a craft it's sometimes worthwhile spending the extra money on higher quality supplies. If part of your vision includes the rainbows then using beads that cast rainbows is essential for the projects success. Don't cheap out on an integral part of the design.