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This paper presents an example of project-based learning (PBL) in an undergraduate course on Image processing. The design of a simple, low-cost computer vision system for implementation on a chess-playing capable robot is discussed. The system is based on a standard CCD camera and a personal computer. This project is a good tool for learning most of the course material that would otherwise be mastered by homework problems and study before an exam. An algorithm which detects chess moves is proposed. It compares two or more frames captured before, during and after a played chess move, and finds differences between them, which are used to define a played chess move. Further image processing is required to eliminate false readings, recognize direction of chess moves, end eliminate image distortion. Many Image processing problems and solutions can be introduced to students, through the proposed algorithm. The results are encouraging - students without any previous knowledge in image processing and advanced topics, such as artificial intelligence (neural networks etc.), may attain a chess move recognition success rate greater than 95%, in controlled light environments.