I'd love to be able to implement this by the deadline for the HaD contest, but there is absolutely no way that I could create anything 'solid' enough to enter the contest before the deadline. However, I'm still going to give a brief outline of my idea and how it could be implemented.

The device would be used to attach to any electrical device, and would connect it to a central network which would be used to control each device. For example, it could be connected to a coffee machine which would put the coffee machine onto your home network so you would be able to remotely controll it. The device would be connected to all of the coffee machine's inputs such as the on/off switch and any dials/knobs, and would make the state of these able to be changed via the network.

It would need appropriate hardware to interface with the appliance's inputs and a wireless communication chip to connect to the home network. It might be better to connect each one to a master device so that each appliance would not need to be addressed individually.

The master could accept commands over HTTP, for example: 

GET http://masterdevice/coffeemachine/waterlevel

POST http://masterdevice/kettle/power ON

This would allow almost any computer or smartphone to interact with any appliance via the master, using something like cURL or a web browser. The master could also host a web page which would allow any device with a web browser to interact with any appliance without needing to install any special software.

For each slave device, I would probably go with a low-end Atmel chip, such as the ATMega328, mainly because that's all I've used before. They're pretty cheap and would be overkill for this. They have a decent amount of IO and analog inputs/PWM out as well.

A ZigBee module would be easy to use for communications with the master device, since the bandwidth is more than enough, and low power versions are available. They can also be interfaced with the Atmel chip via SPI, which is incredibly easy to do.

I don't have much experience in this area, but it could interface with the appliance using MOSFETs for its switches, ADCs for its potentiometers, and other hardware for other bits. Any of the appliances physical inputs would need to take priority over the networked ones (unless explicitly specified), so the slave devices would need to detect any physical changes to the inputs.

Each device could be hooked into the built in power supply of each appliance if it was in the operating range of all of the hardware in the device, otherwise it could hook into the mains connection and use a small transformer along with a linear or switching regulator, depending on what efficiency is desired and the expected power draw.

In the spirit of open hardware, I give permission for anyone to do anything with this idea, and it would be super cool of them to do the same with theirs!

Thanks for reading! Suggestions and improvements are welcome!