Two proposals:
1: Hacking something like those:
to use new innards of current digital cameras (I was thinking of point-and-shoots) would be pretty cool. Retro-factor + cheap use + ease of use.
2. I like the actual PS3 controller in most ways, but when holding it you clearly notice that it's designed for smaller hands. I'd love to see a controller that gives the same feedback and functionallity and buttonlayout (though the select- and startbuttons could be moved to the inside of the handles to be better within reach), but is bigger - making you able to play without acheing wrists. Basic idea is that your hands can rest on the side of your lap while still holding the controller - insanely comfortable use 
