Here is a nice little tutorial on how to construct a keylogger using hardware any techie should have laying around the pad, with the exception of the micro controller.
What's a keylogger?? Well a keylogger is a either software or hardware which captures every keyboard stroke that is typed on a computer. This data can then be reviewed revealing passwords, conversations, important numbers etc. This device is made using a PS2 extension cable and some basic electronics.
Check it out here.