I can't be the first person to think this.
Does anyone know of such a project that already exists that I can start from?
Cheers
I always felt the story of Felix Gallo's "Poppet" project at Data General was interesting: http://metatalk.metafilter.com/13606/#384503
An original Teddy Ruxpin doll would probably have been the easiest to hack, replacing the cassette tape with a stereo audio input and generating the pulses necessary to animate him at your discretion: http://www.illiop.org/workings.html
The Nabaztag rabbit has been resurrected a few times, it looks like you can buy a new "Karotz" model for US$130, needing only a plush exterior: http://store.karotz.com/product/22/karotz
You could stuff another sort of mechanical toy, like a RoboSapien RC robot, into a stuffed animal: http://www.youtube.com/watch?v=e_WJ23Zg1Rg
There's also a new startup named ToyTalk, which seems to be doing something in this vein: http://www.toytalk.com/
You might find it easier to start making something that's not quite as complicated as an animatronic toy. Soft electronics projects and startups have been around for years, with shirts that hug you back and pillows that light up:
Pillow Talk: http://www.joannamontgomery.co.uk/littleriot/?q=node/11
Chatter Pillow: http://sternlab.org/2006/11/chatter-pillow/
For making one yourself, books on soft electronics might be useful.
Making Things Talk: http://shop.oreilly.com/product/9780596510510.do
Fashioning Technology: http://shop.oreilly.com/product/9780596514372.do
Instead of regular Arduinos, you can use sewable electronics specifically designed for this, like the Lilypad, which you can get at SparkFun, in their e-textiles category: https://www.sparkfun.com/categories/204
Adafruit also has their own line, just launched, called FLORA: http://www.adafruit.com/category/92
There are lots of "robots lite" projects you could wrap in fuzzy fabric, too, like this animatronic head: http://www.kickstarter.com/projects/jeffkessler/tj-an-animat...
It really just depends on how complicated you want to get with it. Depending on your experience, it might be best to start small, working through the projects in those books.
One thing I have been wondering is what text to speech synthesis would sound like with non 'human' voices. Most demo's are of course focussed on human voices e.g. http://www.cstr.ed.ac.uk/projects/festival/morevoices.html but it would be interesting to develop some 'creature' ones as per elmo, furby, alvin etc
Have you heard the Karotz rabbit's voice?
The less your animatronic creature does, the greater you project your own emotions onto it, and more likely you are to find it realistic or compelling or interesting or natural. Poor robotic speech instantly kills that empathy. Think about R2-D2's nonsensical beeps (that express emotion tonally) versus C3-PO's obnoxious prattling.
If you're trying to make it be "helpful" by telling you status information, how many times have you been frustrated when someone gives you directions, or is telling you about a problem narratively instead of in terms of reproducible steps? Speech is very inefficient, but for empathizing, Furbish was great.