Sounds like a great project.

My idea for a group project:
Co-Op, sci-fi, Diablo-Gauntlet type game.

Art Pros:
Alien worlds lend themselves well to the diversity of contributers where art cohesion could become an issue.
Sci-fi would be a good choice, Diablo has done hell/demons and Gaunlet has done fantasy/dragons.

Code challenges:
Co-Op Multiplayer.
Random map/dungeon creation ala Diablo.
Prefix- Suffix based loot tables for endless variety in loot (Diablo, Borderlands, etc.).



Lots of great ideas so far.