For Christmas I got a Parrot AR Drone - a remote control quadrocoptor.
The AR Drone produces its own wifi network which the iPhone connects to. This connection allows remote control along with live video from both an onboard front facing camera and a downward facing camera.
Its a great toy - I've been having fun flying it! However, the obvious question is what kind of modding is possible.
Firstly, some interesting sitesRC Hack
The remote control range on the Parrot is fairly limited (~50M) since the connection is over wifi. One of the more practical hacks which I have read about is to add RF control to extend the range to 500M+.
The RF hack is described in detail on these pages
The Parrot Drone does a good job of auto stabilisation. The 60fps downward facing camera is used for stabilization to allow the drone to hover without drifting. However, when it is dark this can't see clearly and the control interface shows a low light warning.
It should be possible to improve this situation by fitting an IR LED or even a visible light LED to the bottom of the parrot. This would allow for stable flight in the dark. I will definitely be trying this out at some point!