The UC Berkeley Library sponsors an annual contest for student research, the Library Prize for Undergraduate Research. The library offers up to six prizes annually: $750 for lower-division students and $1,000 for upper-division undergraduates. The deadline for applications this year is April 14, 2008.
From the Library Prize site: "The Library Prize attracts the very best undergraduate papers from courses taught in departments across the campus. It recognizes excellence in undergraduate research projects that show evidence of significant inquiry using the library, its resources, and collections and learning about the research and information-gathering process itself."
You can find more information, including information regarding eligibility, selection criteria, application procedures, and a FAQ on the Library Prize site. Links to past winners' projects from 2003 on are also on the site.