There are a number of different options for this assignment. Pick the one that fits in with what you are planning to do for your project. If none fits, do the chat client-server chat or the HTTP server.
HTTP Server - For this option you will write a very basic HTTP server. (HTTP information) You only have to implement the "safe" methods, but you can go further if you want. Ideally you could push it far enough that if you run your program on your machine and tell it port 8080 you can open a web browser and give it the URL http://localhost:8080, and it will give back information and perhaps let you look at files in a particular directory.
Note that you can open a ServerSocket on port 8080 and start reading from it then point a web browser to the above URL and see what the request looks like. Using a web browser in this way will be instrumental in helping you to write and debug this program.
Client-Server Text Adventure - This is basically doing your text adventure over a network. If you have code from last semester to do a text adventure you can use that. The only difference is that input doesn't come from readLine, it comes from reading information off of an InputStream that you get from a socket, and the output doesn't go to println, it writes to the output stream of the socket. (Technically you can make readLine and println do this using methods in the Console object, but later you will want to read from multiple sockets with multiple users so it would be better to get set up to read from the socket now.) You can have the client be telnet unless you want to write your own client.
Client-Server Chat - Write your own chat server and a GUI client for it. There should be some way to have it so that messages don't go to all the people on the server. This can be done with private messages and/or rooms.
Simulation Server with Client - For a later semester.