Clock that writes time

Using two servos to control a pen, a RTC can send the time to a pen that writes the time on a piece of paper that then moves forward and shows the time.
If the sketch can control the pen, then the door is wide open to get the pen to write anything.  Could use a joystick learning program to "learn" numbers and letters.

There is some interesting work on candlebot from a Bristolian that may be helpful.

Candlebot video on YouTube

Multiple options on controlling pen movement.

1) 2 servos, easy but could be messy!
use the servo.h and joystick tutorial

2) X and Y stage using rods or belts.
Makerbot uses both and there are some interesting images and ideas there.  For the threaded rod version, the Z axis of the Makerbot works, uses belts as well.
Makerbot also has a great X-Y stage, controlled by stepper motors and belts - lot of work there

Also some ideas at bothacker and reprap

Pulleys can be sourced from McMaster

Draw shape with arduino

I could potentially use a PIR sensor or  IR sensor to draw shapes of 3-D objects. In a housing the PIR could be passed over an object then the distances calculated and plotted in processing to draw the shape.  Data could be stored on an SD card as a coordinates and then subsequently plotted.  Real time plotting would require a PC to be attached.