Schematic to breadboard layout

You would need to post the code with the for (int i = 0; i < 8; i++) removed for us to do much. You do also need to remove the { and } if you didn't. For instance I think this should blink 1 led if it replaced the loop in the above routine.

void loop()
{
leds = 0;
updateShiftRegister();
delay(500);
bitSet(leds, 1);
updateShiftRegister();
delay(500);

}

this initially sets leds to 0, writes it to the shift register waits for a while then sets one bit in leds to 1 to change the state of the led and writes that to the shift register before waiting some more then repeating. Replacing the 1 in bitset with 2, 4, 8, 16, 32, 64, or 128 will change 1 led further along with each number increase.

Peter