So, a quick brain-dump from the list of paper:
Engagement with LTS / VLE very important (everyone tells me). Perhaps it would be useful to spend some time in LTS seeing what they get up to?
Brian Eno's cards: Oblique Strategies. These give obscure guidance in creative situations. They are nicely suggestive of a way forward when you are stuck.
Tim Benton's course on History of Architecture and Design (A305), now long out of presentation, has some fantastic text and exercises looking at the modern movement. There are so many parallels with todays Sustainable Design movement that it would be worth having a module on this.
Possible Ideas for titles: Design your Life, Design for Life, etc.
The cultural probe design method would be a good way in for students to find out about other student's/people's lifestyle. We could also ask students to create something in Second Life (a product, a gathering, a system).
If one of the ideas behind the course is to define design we might have a series of related questions: 'what do people need?' 'what is waste?' with associated exercises or projects. Students could take that days newspaper and note down all the uses and contexts of the word 'design': is positively or negatively used? Choose something well-designed and not well-designed and describe why.
An adapting technology exercise: look around you and find something that annoys you, or that is overly complicated. What would you do to improve it? Work out a way of doing it. Reference here might be the TV remote control.
Clearly the manipulation of digital materials will be an important skill to develop. This might include: the ability to edit videos (make stories), to photoshop images (simlulation), to design sound... we could ask students to introduce themselves to each other by making a video (using a mobile phone, camera, or video camera). There is an underlying communicative ability here that is being developed which could be used at the end of a design process: Analysis -> Synthesis -> Communication. It is also called visual literacy of course...
Is understanding of change important? I can think of the ability to understand small and large scale change as an important prerequisite for making interventions. I remember the last chapter of Stewart Brand's How Buildings Learn as being useful reference here. Also the novel Ulverton by Adam Thorpe, which is about how a place changes over time.
Team composition and teamwork: an online Myers-Briggs questionnaire to sort the students into groups? I'm sure there must be business school material on this.
The body of students doing the course represent a considerable resource in themselves being regionally diverse (unlike most design students). A significant part of the course could be about understanding this group of people from various design angles.