I like the idea of "f.lux for my house". Might improve my sleeping. This part of the project is potentially life-altering.

Lots of people in the comments are getting hung up on the "control your lights over wifi" aspect of this project, which is far less interesting. INSTEON is (AFAIK) the current best solution for home automation, and already does this pretty well: http://www.insteon.net/

It's backwards compatible with X10, uses both powerline and RF to send control signals, and each INSTEON device also functions as a repeater, so you're far less likely to run into poor signal issues that plagued X10.