Using a ADC with I2S seems quite useless due to all the ADC's available on the chip. Unless you are able to do more analog line inputs with a single ADC. But since you'll only have a 3-wire I2S, it will be (a bit more) difficult to do multiple channels, since you'll have to introduce a 3rd clock.
A project with a DAC could be one with a stereo, or more, output. One of the ideas that I've been thinking about it an alarmclock using an internet stream from a radiostation. However, the onboard memory might be a project killer. Don't know for sure, so I'll have to dig into that deeper.
Specs at this moment would be: Power over Ethernet, stereo DAC using a MAX5556 and a display (which is undefined at the moment)
A second project was an analog intercom, but since they won't like it when I hack the current intercom, I'll leave that for what it is.
Update: I took a closer look, and the LPC1768 has a TX_MCLK and a RX_MCLK pin, however it's not connected (pin 82 and 85 in the schematics).
I just got a question about I2S and mbed.
You may not yet know it, but the mbed includes hardware support for I2S, a communications protocol for digital audio. The common case would be to connect a high-quality audio Digital-to-Analog Converter (DAC) and/or Analog-to-Digital Converter (ADC) to the mbed.
There is no library yet as we haven't ever looked at anything that could talk to it, but seems like it has potential for some interesting applications.
The specific question was about where it pins out, so here you go:
Those listed in ()'s are alternate pinout locations.
Lets see if any projects can make use of this peripheral!