One project that was used for the passcode challenge is called the Zen PIN. The problem is people who shoulder surf can see your PIN on a keypad system. So a fun and simple solution is to have the user memorize an algorithm instead of a PIN number. For a Proof-of-concept the Zen PIN was developed that uses three lights. The user enters a random PIN and the system then generates an internal random PIN. It then blinks certain lights to indicate if the next number is greater or less than the one last pressed. The user follows these visual clues to "unlock" the keypad. In the PoC this just lights up the green light and plays a "good" tone.
You can take any type of spin with this. Such as, using multi-colored LED buttons that randomly display a color and the user knows to always press to the left of the "orange" button. Etc.
For more information on this project see the wiki