Let's use biology in ways that make sense, aka lean on the strengths of biology to accomplish tasks better than would be done through other through.
Things biology is good at: parallel processing, self-regeneration, communication, ...?
Food or Energy
Allergen free foods - custom garden toolbox
Material conversion (to fuel)
Inspired by the lovely aroma in the hall just now: organisms that produce cool smells...like fresh baked cookies, or flowers... Or maybe organisms that can cover up bad smells? Would work by emitting a neutralizing chemical or by absorbing the nasty one...I guess this could go in environment actually
Bacteria that absorb toxins in air (sulfur dioxide, etc) or water (?)
Something to detect toxin concentrations in air - wouldn't use e. coli because they need to grow in aqueous environments (or could it work through liquid/air interface or on plates?)
Organism that breaks down [something] (for removal of unwanted waste).
Health or Medicine
Invasin-based tumor-seeking bacteria. (what else could invasive bacteria do?)
Bacteria for weight loss, other health benefits
Different colors of bio-films depending on environmental stimulus (could create patterns)
Light production (bioluminescence), organic lcd's wikipedia link
Robots that can smell, eat
Connections between biological systems and electronic systems
Slime molds, or other types of multicellular fungi - not sure what we'd do with them, but they've got some very cool properties (reproduction, communication, algorithms). I remember reading something about algorithms governing where hyphae grow, and how that has been linked to traffic design...I'll see if I can find it again...
Sound responsive/mechano-responsive organisms - bacteria that react in different ways in response to loud noises, or high frequencies (screaming yeast?)