Well, I came up with what I thought was a pretty cool controller design....and now I'm dissapointed to discover it's actually pretty similiar to Don'tHate's (great) design. I'll try to post mine later.
Anyway, I want to say something about output real quick, and the whole rumor regarding you being able to "feel" games. I think the answer is porbably air.
At disney, they use air all the time to simulate all kinds of things. Compressed air is used to simulate the experience of something touching you and moving across your body. Examples: (ride spoilers) In a bug's life, they simulate bees stinging you and bugs crawiling on you. In California's Honey I shrunk the audience, they use air to simulate mice crawling up your legs. (end spoilers)
Disney also blows air on you all the time to, for example, simulate monsters breathing on you, and arrows/other things whizzing past you.
How could they put this into a controller? I'm not 100% sure...But here's what I'm imagining: (1) air holes on the grips that can simulate touch, and (2) places on the controller that blow air directly onto your face/body. (that second one might be kind of hard to implement since people hold controllers in different positions. If it blows air 360 degrees in all directions, though...)
Now combine the air with hot/cold output, built-in-controller speakers, and built-in rumble, and you've got a pretty cool and immersive set up.