A simple but useful idea for a student project is an application that makes a presentation out of a collection of image files. The simplest operation would include taking the name of a directory as input and making a presentation file out of all the image files in the directory by putting one image per slide. The challenge in this application is to understand the ppt file format and write image information into a ppt file.
The applications of this idea include making a photo album. If you want to add more functionality, you can think of making an export to the Flash file format, so that you get an impressive flash photo album. That will be a bit more work, but will make the application attractive and will get manny more users.