We plan to use an Emotiv headset like the one I used for my mind-controlled UAV project to use the main character's psychic abilities. The plot isn't fleshed out yet, but the demo will cover up to 4 different mental actions (the fewer, the more reliable) and most likely take advantage of mood detection, built-in gryroscopes, and/or facial expression detection. We are even considering using a suit capable of picking up user movement allowing them to control the character with their body instead of buttons altogether to provide a more immersive experience. Using a Kinect is a possible alternative.
If we actually include motion tracking, this is going to be one heck of a demo
Nothing besides the group is set in stone yet though, as projects need to approved of by a committee since not everyone can do an independent project. There are company and university sponsored projects, but none of them seemed very appealing to us in comparison to our game idea. We and other professors we've already pitched the idea to believe this will be an innovative project introducing new paradigm of gaming instead of yet another typical game a group of seniors decide to throw together.
As for the thesis, I will be figuring out the plan for the next component tomorrow. I already have some ideas after working at Google for a better implementation than the one I had in mind before this summer. Hopefully this third of the thesis goes smoother than the last one.