While it is dwarfed by its higher-end competitors, the Spartan 3E is still a very capable device. This board in particular has the additional advantage of being built for use with Digilent's peripheral modules (PMOD). This gives you access to all sorts of things: various forms of serial I/O, A/Ds, D/As, GPS, Bluetooth/Zigbee/Wifi, memory expansion, breadboarding, input and display devices, audio input and output, and more.
Here are a few possible project options:
- Logic analyzer (this has largely been done already, quite possibly with this board, but could still qualify if you do it from scratch)
- Low-speed oscilloscope using PMOD A/D
- Arbitrary waveform generator using PWM and a filter, and/or PMOD DACs
Here's what I would probably do:
- Absolute position and orientation sensor using PMOD GPS, compass, accelerometer and gyro modules
- The FPGA is perfect to implement the digital filters required by the noisy MEMS devices
- The GPS provides absolute positioning with localized inaccuracy (i.e. the solution does not get progressively worse over time)
- The accelerometer provides relative positioning with very high accuracy but significant drift, which will need to be corrected for using a filtered GPS solution
- The compass provides absolute orientation, but is very susceptible to interference and thus suspect on its own; it can be calibrated with the GPS if the GPS is in motion (to divine a trajectory)
- The gyro provides very accurate relative orientation, but needs to be anchored against an absolute (calibrated compass) orientation solution to account for drift
There's a lot more to it than that, but this project in particular has the advantage that no matter how many times it's solved, there will always be another way to do it. People (and large corporations) have been solving this problem for decades, with varying degress of success. The difference between 1993 and 2013 in that respect is that the fiscal barrier to entry has gone down by three or more orders of magnitude ($250k+ down to $100+).
Above all, make sure you choose a project that you'd like to use when complete. When you hit snags in the design process, it'll be hard to maintain your motivation if the result is going to be ho-hum. Good luck!