For home automation you could have input pins to read certain conditions of binary devices such as if a door is open or not (contact switch) or if the power is on or not (a relay hooked up to a wall wart plugged into a non battery backup outlet). I'm not sure if the Pi has analog inputs but if it does, you can also read voltage or other conditions from any devices that produce a variable voltage. Need a voltage divider to ensure it's within range. I use this with my arduino to monitor my backup battery bank for example.
Digital pins is really all you need though as you can use external components such as ADC (analog to digital converter). There are various standards for digital semi conductor/sensors such as i2c and Maxim "1 wire". You can hook up digital temp sensors and so on. The list goes on. When it comes to micro controllers you can get right down to the simplest communication language: binary.
You can also control stuff by using a pin as an output. On = 5volts off = 0 volts (actually with the Pi it might be 3.3. I'm honestly not that familiar with it myself but want to play with it more). So say you have a relay you can make it turn on or off. The nice thing with the Pi also being a computer is that you can basically code a web page front end to a program that controls the pins. The possibilities are endless because it's all open source. I could not care less about some of the pre made home automation stuff that comes out, it's all proprietary and some is even cloud based, eww. With the Pi, anything is possible.
You could also use it to run an automated meth lab or pot grow op. :sneaky: Make sure you use a Nema enclosure meant for such environments. :awe:
I've been reading up a lot on electronics myself as I want to build a better home automation device that is easier to expand and manage, and I did discover a very cool electronic item, which is called a bit shift register. You can practically control unlimited items with them. They essentially give you additional output pins by using some bit shifting techniques. Elaborate christmas lights displays where it seems practically every bulb is on it's own "channel" more than likely use something like a RPI and bit shift registers.
Of course the PI can do a lot of things not even having to do with the IO pins such as a HTPC, mini print server, etc... One thing I'd love to see on it though is a sata controller with like 4 ports or something but guess that would be hard to fit on and would chew into the cost of making it.
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