Yeap, thats about the size of it.
The KB system can grow its *database* such that its answers become more relevant. e.g A simple search engine provides better results with the more webpages it indexs.
An AI based system will improve its reponsiveness through deduction / feedback of the given results to a problem. e.g Finding your way through a maze, each time a decision leads to a dead end the system will go back and try again. Eventually the system will learn that following one wall will always lead to the exit.
Then there are the highbred systems that use both a KB and AI to improve the system. e.g. Google, it uses both the KB of all of the indexed pages along with the feedback of "click throughs" to determine which pages are most relevant to a given search string.
I will have a little think about projects but neither of these subjects are ones I have much experience with (I steered well clear of AI and KBS as I hated the maths
)