There are some good answers here on how to find an masters thesis topic, but I am looking for advice on how to advise undergrad students who are looking for a thesis topic. Finding a thesis topic is a little bit different at undergrad level because it is the first time. How can I best help a student find a good thesis topic at undergrad level which will help them to get into a good university for masters and/or PhD?
An undergrad thesis is not expected to be mind-blowing or even necessarily that original (see @Cape Code's response about Lit Reviews, often a great option). Look to make some incremental improvements on a paper you've read that really interests you. Maybe you did a project for a class that you did very well on and would like to explore a bit more deeply. Starting from scratch is quite daunting for an undergrad (even a grad student or professor).
The least successful undergrad theses are often the ones that tried to be too groundbreaking and in the end the author had nothing because they couldn't make significant progress. Most theses are good enough to be accepted, if you get the work done. They do not have to be publishable. You usually only have about 1 year to finish an undergrad thesis, while completing a full load of courses. This is way different from a PhD or even a masters thesis where usually more time can be devoted. This is your first time at research, so have fun with it and don't worry too much about the consequences.
Often an advisor might hand you a project to work on, but you should come to him/her with general interests and having already read some of their papers and personal website.
There is always the option of asking for a thorough, methodologically sound, literature review on a given subject. Especially if you have too many students to allow them to do experiments in you lab for example. By allowing a certain freedom in the subject to pick, you give the personalized aspect without the risk of choosing a broad or unfeasible practical project.
Literature reviews have the advantage of teaching the undergrad how people usually do research. It can also confront them to the diversity of scientific opinion or the large variation in paper quality and thus develop a critical approach to literature reading.
I find these skills to be of great value at the undergrad level. And hey, the result might actually be useful to your research, which will be gratifying to the student.
I did not read the answers regarding master thesis topic search, but at least in Germany I see no difference in search strategies.
My personal opinion is: Look for something which is in the field you want to go into, find something which is challenging but manageable, and get a good advisor who helps you if you struggle.
If you manage to find all three, you did a very good job.