It's really important to know at the start of the semester what projects will be wanted and needed. Students may have their own ideas for what they want to do, but it's so much easier to get the ear of a developer when you are working on something they want. This is critical if you need to get something committed.

Another commenter mentioned Google Summer of Code. The projects that are successful for gsoc are the ones where students and mentors did a lot of talking about what the community wants before submitting a proposal.