I was thinking it would be a somewhat interesting excercise to explore the intricicies of artificial intelligence. Obviously we aren't going to come up with something as sophisticated as the human brain in Java, but it is conceivable that we could come up with something more specialized. A conversation bot, for example, or an AI that can play some game (well). The type of AI that I find most interesting (and have the most experience with) is DSP/command software, to control an unmanned vehicle.

Ideally if we were to follow this route we would actually come up with some type of system that is capable of actual learning, rather than something boring and script based.

Addendum: This is something that we could combine with the other idea of creating a game. We might need to strike a balance between how much time is put into the game itself and how much is spent on developing the AI though.