I am looking for any open source projects to get myself involved in where I can contribute my skills as an interaction designer - focusing on usability and obviously good user interaction. I looked at a couple at sourceforge, but looks like they bundle usability with graphic design (I shall tackle that issue another day).
Any ideas on sites to scour for projects or any leads on projects?
I'd suggest something like KDE, GNOME, Firefox or Eclipse. They have a large user base and did some work on usability already which should help to get you started.
The usual way to approach this is to get in contact with someone from the team, introduce yourself and offer your help. If they can't help you directly, they should be able to forward you to someone else.