Use Laser pointer to play a LED board game.

The Laser Command by Eiji is a very brilliant project. He used arduino mini to build a complete LED board game, and just one 8x8 matrix led as the game output & also input device. Player can use a laser pointer to point to the led and start playing the game. The author website has a very good explanation of his project, it is worth to read if you are interested how to use LED as input : http://www.cs.cmu.edu/~ehayashi/projects/lasercommand/

Laser Command from Eiji Hayashi on Vimeo.

LED used as touch/light sensor

LED is a light emitting diode, it is commonly used as output device. But by connecting each end with GPIO, you can use it as input device with some software tricks. This idea is cool, and I remember the first time when I got this idea was from the cool research site "Multi-Touch Sensing through LED Matrix Displays", you can find the information here:
http://cs.nyu.edu/~jhan/ledtouch/

Recently, I found someone use the same idea to implement a LED input sensing demo with ATmega8, it is very interesting.