The Perl project has a very nice application template which dmitri pointed out to me, and I've updated our application template based on it. So it is now:
DRUPAL.ORG USERNAME:
Your username on http://drupal.org/
LINK TO PROPOSAL DISCUSSION:
Before you submit your application, you should discuss your project idea (or the approach you plan to take on one of our ideas list ideas) in the http://groups.drupal.org/soc-2008 group. This allows the larger Drupal community to provide feedback which can help you in your application. Please provide a link to the thread that talks about your project idea.
BENEFITS TO DRUPAL/OPEN SOURCE COMMUNITY:
Who will benefit from your project and in what ways? Describe the likely user-base and what means they might currently be using to accomplish the same ends. Are you proposing an incremental improvement, a fundamentally new approach, or an aggregation of existing tools/ideas?
PROJECT DETAILS:
You can't be too detailed. Describe prior art and the concepts on which your project is based. What is new or different about your approach which wasn't done/possible before? Do you have any preliminary findings or results which suggest that it is possible and likely to succeed?
Note any uncertainties or aspects which depend on further research or experiments. What is your plan for dealing with snags, unforeseen difficulties, or setbacks? How useful will your results be if (when) not everything works exactly as planned?
DELIVERABLES:
Describe the quantifiable results and goals. For example, will you create design documentation? One or more modules? A core patch?
PROJECT SCHEDULE:
What are the milestones? Be sure to include dates which are compatible with the Summer of Code timeline as laid out in the program FAQ.
BIO:
Who are you? What makes you the best person to work on this project? What experience do you have with Drupal and other Open Source projects? What development tools and methods do you use? Have you previously been responsible (either as an employee/volunteer/student) for a project of this size?

Comments
Looks good. The
Looks good. The schedule/timeline would be a rough overview, right?
http://www.twitter.com/lxbarth
Yep...
We basically want to know "Have you thought about a schedule?" ;) In reality, this probably won't be reflected in the way the project goes, but it's good to know the timeline the student thought they could adhere to in the beginning, and reflect back on that at the end and see how it compared.
How do we get our proposals reviewed?
We have a pretty well thought out one here, that isn't on the list:
http://groups.drupal.org/node/9633
We also have three mentors ready to work on it...
Alex Urevick-Ackelsberg
ZivTech: Illuminating Technology
Alex Urevick-Ackelsberg
ZivTech: Illuminating Technology
Feel free to move it over once it has some backing
to http://drupal.org/google-summer-of-code/2008/ideas-list
We just don't want people to add ideas there without getting a couple +1s first.