If you have an FPGA, you'll need a temperature sensor with digital output, like this:
http://www.knjn.com/?pg=cat&src=15.
But unless your class was about FPGAs, don't use an FPGA for this project! It's simpler to use a microcontroller (PIC or AVR/Arduino).
You can use the same digital sensor; Or if your microcontroller has analog input (ADC), a simple analog temperature sensor can be made with a thermistor and pull-up resistor. You'll have to work out a table of voltage->temperature (see
http://en.wikipedia.org/wiki/Thermistor#B_parameter_equation) and store it as a Look-Up Table. You could even put the 7Seg patterns into the LUT.
Nick