The other demo I showed during the launch of Microsoft Academic Projects was to demonstrate the web services. Though this demo may not have real business application, one will be able to guess the power of Web Services and its extensibility.
I setup my webcam at home and used TinCam, to dump images shot from the webcam into a folder at a given interval. I referred this article and used Binary Serialization to transmit the images from my PC to the Web Service consumer application which is a simple WinForms application.
A very simple application, but cool to watch. Download the source here.