Some possible suggestions for topics:
We are going to be doing chapters 1-10 in Cover and Thomas. The other
chapters contain a lot of good topics for a term paper (although I expect
you to use sources other than Cover and Thomas and cover material that
are not in the textbook. In particular, chapter 11, Chapter 14, Chapter 15,
and Chapter 16 contain a lot of good topics for term papers.
1. Information theory in practice
How do cell phones work? What are FDMA, CDMA, TDMA, coding?
How does CDMA work?
The theory of multiple-access and broadcast
channels, and its relation to cell phones.
How does image compression work?
How does video compression work?
How does the coding in CD's work?
2. Theoretical advances in information theory:
Huffman codes with unequal letter costs: these turn out to be much more
complicated than standard Huffman codes. For references, google the phrase
above.
The work surveyed in
Constrained
sequences, crossword puzzles, and Shannon (you'll need more references
than this, but you should be able to find quite a few of them).
What are BCH codes, or Reed-Muller codes, or Reed-Solomon codes. Where are
they used?
What is space-time coding? How do multiple antennas help information
transmission?
What is the theory (and maybe some history) of turbo codes?
Explain convolutional codes and the Viterbi algorithm.
What is Slepian-Wolf coding (sec. 15.4)? You could either do the theory, or
concentrate on the question: what are practical codes for this problem?
Present Lovasz's result about the zero-error capacity of the 5-cycle, and
maybe survey the current state of results on zero-error capacity.
3. Algorithms in information theory:
The Burrows Wheeler transform, why it's useful for data compression
and how to do it and its inverse
quickly.
The Berlekamp-Massey
algorithm for decoding BCH (and related) codes.
List decoding (for Reed-Solomon codes and others; see Madhu Sudan's papers
(his survey paper "List decoding: Algorithms and Applications" and others).