I have finished my project (a while ago actually, but better late than never). And would first like to thank everyone who helped me get this working. Okay now to the details:
Arm: lynxmotion l5
Sensors: Color (custom) IR range detector
It has an IR detector at the base of the shoot to detect when the shoot is empty. The shoot is made of lego. The color sensor uses a tricolor LED with a burnt out red, and a red LED and a photo-resistor. It detects the amount of light reflected back from each color. The arm is programmed by dead-reckoning. It currently only is programmed to detect red, green, blue and white, but could be modified and improved to detect any color. The photo-resistor should probably be swapped with a different one. I don't have it at home right now but expect pictures and video this week! I'll also try and remember to tell you what grade I get on it.
Great company, great community. Thanks