That sounds like a fun assignment. I made some laterns out of old cans one time. Paint cans work really well for this if they are clean, but you can use any kind of tin can, like a soup can or whatever. The different sizes make a group of them look really pretty.
OK, here's what we did:
1. fill the can with water and freeze overnight
2. take the ice-filled can out of the freezer and use a hammer and awl or nail to punch holes all around the can. You can make all kinds of pretty pictures and designs.
3. If it's not a paint can that already has a handle, you can punch two holes up at the top to thread a hanger through. Just plain old wire from a coat hanger works fine, but you can get creative if you want
4. When the ice melts, just put a candle in the can and voila! They look really pretty.Here's a link
to a picture, her directions are a little different from mine but the results are the same.
A search on Flickr for "recycled lanterns" had some cool pictures
OK, well now I want to make a lantern too. Have fun with your project!