High Priority Free Software Projects
fsf.org
fsf.org
How about something completely original? How about we start racing the commercial sector to a worthwhile goal like computer vision, or decent speech recognition. Anything more inspiring than a "Skype replacement" will do fine.
We just need a few more things where the open source version is the dominate player, instead of a clunky, half working "free replacement" for commercial software that wasn't very good to begin with.
While Octave is good numpy/scipy/matplotlib are also free (in both meanings of the word) and great software. There is also Sage.
So get started writing machine learning libraries in Python!