Every year, the students in my class participate in the Invention Convention. Each student invents something and puts together a display board with the information. The kids had a blast and learned a lot about design process and the steps to inventing an item. We even made business cards and conducted on-line patent searches. Everything was done at school with the exception of building the prototype! If you have not tried a project like this, you may want to try it! It is well worth the class time!
Smart Chick Teacher's Blog 
I just visited Maker Faire at Greenfield Village in Detroit and saw an activity similar to this. Participants went through a series of steps involving getting the idea for a product, designing a prototype, creating the prototype and presenting the prototype. I took pictures to use it in my class this year and if I wasn’t restricted to bandwith by my server I’d upload pictures for you. Just nice to see this and reconfirm that it’s a great idea!