I think a blog would be too basic. There isn't much to it. All you need is a few text fields, a usable GUI (which isn't that difficult for a blog) and a database system that can store the blog.
I think that while it's been done a lot, making forum software would be a good way to get people experiences with something that requires some designing and planning both on the server side and the GUI. I love working on the server-side of things that interface with a database and I think this would be a great way to show what kind of work is really involved in making a good back-end.
Also, has anyone put any thought into code distribution? We'd need something like SVN or Git so we can collaborate and share code properly.