Noise reduction?

I have a few questions regarding our thesis topic. The title of our proposal is "Speech to Text and Voice Command SMS Enhancement for opensource FMA (Float Mobile Agent) with Noise Reduction Support for Sony Ericsson Phones. " Since all the technology involved in this thesis are somewhat mature, our adviser told us to focus on developing our own Noise Reduction application or enhance an existing algorithm. We don't have any idea how to develop such an algorithm. Is this very difficult? What are the factors to consider when developing such? What are some processes involved? Is there an opensource noise reduction software that reduces real-time noise? We want to enhance it if there are any opensource software available.