I'd like to make a story-driven god game in which the user designs the personalities of characters, shapes the environment in which these characters will live, and then sets them loose to act out little dramas. The drama is important here. Instead of tediously managing the mundane details of the characters lives (as in the Sims, or Creatures, or Tamagotchi), I want to watch my creations do things like struggle heroically, fail tragically, fall in love with and betray each other, and in general foster human complications that build to satisfying climaxes before being resolved. Instead of the Sims, think Clash of the Titans. If you haven't seen the movie, it portrays Greek gods literally toying with the lives of mortals. To the gods, the mortals are like little animated action figures: the gods position the mortals in various situations, and then watch 'em go. Being a god in this sense looks to me like enormous fun.
A version of this game played collaboratively on the projector table would be especially fun, I think. The virtual actors demoed during the first class would also be useful for this project.
The problem of dynamically generating story-like actions for a set of agents is a difficult one, both creatively and computationally, but I have some ideas.