Your project statement should be a narrative of approximately one page describing your proposed software application, outlining all major functionality and highlighting any special features the software will have. Try and "sell" me on your proposal as if I were your boss or a potential investor in your software company.
Keep in mind my request that all applications should include some communication across the internet (e.g. game played across the net, data retrieved across the net, etc.). Your semester project will be graded in part on how much you challenge yourselves, so you should propose something "non-trivial" (though not something impossible -- I can help in determining what is do-able in our limited time frame).