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Don't get too ambitious in selecting a project. Select one which is practical & achievable within deadline. Don't try to get only software or hardware only involved as a combination of both will really make an impact in future interviews.
Complexity of project doesn't matter, what matters is how much do you know about your project. Successfully building something huge, but now knowing it completely results in bad impression in future.
Regarding ideas, I would say if you are really not interested in soldering & pcb designing stuff, then get ready made kits. Study them hard & then build something from them. That will not only increase you knowledge but also will reduce you work.
If you want to do something with VLSI, then you can build a Graphics LCD controller based on FPGA. Terasic technologies offers kits for Cyclone FPGA DE-1 & a graphics LCD which is compatible. You can then write codes to display TV on LCD screen or display GIF files from PC. Visit www.altera.com and find partner development kits for more details.
In robotics you can build a robotic arm which can be speech controlled, or a camera based robot where robot follow a particular object. www.imagesco.com
If you are from India, tell me I can help you with robotics parts from about site as I work for them.
In both of above case, theory to be referred is only 1 or 2 books, ready made kits are available.
Take it from me, I couldn't finish my project in time as I was too ambitious & dropped the idea of using kits initially.
As bigaussie said, don't choose a project on the grandure of the title (an overly complex project will not serve you well, and undergrads don't have the same resources available as research students/post Docs etc). You need something fairly basic that there is going to be a lot of information freely available in the public domain. Final year projects normally have strict funding constraints too, so bear that in mind.
If you have an idea of what field of work you want to pursue, try and pick a project which will be beneficial to that. I chose analogue projects for my Honours and Masters, my masters project got me onto a PhD because the subject matter of both were so closely related. That was my foothold into the world of analogue.
Best of luck,
Added after 3 minutes:
If you want to follow the analogue route, let me know (and what field of analogue..audio, VLSI, etc) and I can think up a few projects that should be of a suitable level and be fairly easy to do in a couple of months.
i will sugest u to do a project which is practically need in the industry,it gives you both thr research and practical knowledge so i suggest u to design a system to controll devices remotely using wireless system ..........
how about automatic student attendance marker using RFID technology? All u need is RFID chip, RFID main control unit and a computer with interface software.
An RFID chip is embedded in student's ID card. When he or she enters the class, the main control unit inside the class will detect the chip wirelessly. Then the main control unit will give signal to the computer and the computer will mark the attendance of the student.
Thanks and good luck for your future undertakings!