watching Star Trek,
Build a tricorder? (buttons, LEDs, sound effects, LCD display?)
You could have some actual sensors integrated as well, like a compass, light sensors, sound recorder, even a small camera. If you base it on a Mega you'll have expanded I/O for more sensors. Or you could use one of the smaller board form factors (like the mini, micro, and nano), you'll have less pins physically available but they are easier to fit in a hand-held device that also contains other hardware.
Also you might appreciate that someone already has a fairly successful project to create and sell a real-life tricorder. Although of course, he is using much more powerful processors than Arduinos in his designs.