As Jason suggests, you should try to find the answer to your questions in your own frustrations. Where there is frustration, there is a market (usually).

I went through the exercise myself and blogged the results: http://aymeric.gaurat.net/index.php/2010/my-frustrations/

I would love to hear people's frustrations too.

Agree with Jason .. scratch an itch .. that way, even if nothing worked out, you would still have one loyal user -> You

In good probability, there'll be others who share the same itch.

http://www.paulgraham.com/organic.html

I always find it hard to organize my reading (for most part technical reading). Do you think a service can help there? Like I can keep a track of books and papers I want to read and also get ideas from other people based on what I am currently reading/learning.

or try contributing to an opensource project that interests you