Ive converted someone else to the wonders of FPGAs this week because he wanted a video controller and he was using a pic (eeeeek!) to display ascii characters on a pal display as they were recived over a serial link and all the processor had time to do was generate the sync pulses and do the font lookup for each character.
I think you should do a video controller that can display 3-d vector graphics as well.
Ive just remembere there is a vga controller in the code library for an Altera ACEX device which just uses the block ram on the FPGA as a dual port video memory that can be written to by an external micro while the display is being updated.