The general topic area in which the proposals are expected to fall are information management and use, but if you have ideas outside of this area that is ok. The proposals you make will be the basis for the course projects, so don't propose something too large like designing the entire interactive web site for Fidelity. Instead, you should look at either an existing systems and how a piece of it might be improved, or propose a new interface that solves an existing problem.
The proposal should be an essay of no more than two pages. It should include a concise statement of the problem you've observed, a rough description of the types of users and their primary goals (this will get fleshed out more in the next assignment using personals and task analysis), the types of people who would act as participants to assess your design (both who you would like ideally, and who you will engage lacking the ideal participants -- you will want access to at least 10 people over the course of the semester), suggestions for improvements to the interface and a rationale for those improvements.
For examples of how to do these kinds of writeups, see the projects at http://www.sims.berkeley.edu/courses/is213/s03/projects.html