Click the image below for a video of my latest thesis prototype (or download the full-size version here).
The working title is Generate/Modulate. It's essentially an interactive Markov chain generator, based on word probabilities. As the source text (Genesis 1 from the KJV in the video above) is parsed, the program makes a list of all two-word collocations and every word that can follow that collocation; for example, the collocation in the can be followed by any of the tokens in this list: image, open, midst, seas, earth, etc. Pressing the "A" button on the controller looks at the last two words on the screen and displays the word most likely to follow them. If more than one word is possible, the word is displayed in blue, and you can use the joystick to move between alternatives. If only one word is possible, it's displayed in red. Pressing "A" again will generate the next word in the chain, using the most recently generated word plus along with the word that directly precedes it.
A wordy explanation, but I'm actually kind of happy with the intuitiveness of the interaction. You're building a text that retains the semantic and rhythmic characteristics of the original, but with unexpected syntax and lexical juxtapositions. The interface constantly presents you with choices that are immediately meaningful, but also strongly suggest the shape of future choices. It's kinda fun to watch, too.
The Xbox 360 controller isn't what the final interface will look like, of course—I was just using it to prototype the software and the interaction as quickly as possible. I've had a couple of ideas relating to the final interface. Here's my favorite so far: