We've just registered as a mentoring organization for the Google Summer of Code 2011. Here a couple of project ideas students could pick from / expand upon. Feel free to suggest more in comments.

Most projects will require a decent knowledge of Java and various libraries.

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We currently have an OpenSocial integration module, allowing OpenSocial gadgets to be embedded in Magnolia pages. (see Magnolia OpenSocial Container). It's currently lacking oauth integration, which would allow "protected" gadgets to be embedded. As a typical use-case, we'd like to embed Jira gadgets, showing results relevant to the user looking at the Magnolia page.

Your ideas !

There are plethoras of potential module ideas out there, we're sure you could come up with something we haven't thought of writing down here.