Alex from insideGadgets had an interesting project last year on non-contact AC detection and I wanted to try it out and learn how it works. He hooked one leg of a 1M ohm resistor to GND and a wire to the other that goes to an Analog input. The wire acts as an antenna and picks up noise when moved close to an AC line. Here is what the oscilloscope sees when I move the thing bout 3-4 cm to a live wire and then 1 cm:
The noise can be picked up by the ADC, I created a trivial sketch to light up Funky v2‘s LED when AC is detected. Walked around the house to try it out on few wires, it is pretty sensitive. Can pick up wires behind walls too. Since appliance wires are powered all the time, you can’t use this approach to detect whether they are on or off, this just sees if there is AC flowing or not. 
I can’t think of any practical use right now, so this is just a fun experiment.
A word of warning: do not rely that this detection method is reliable – it is fun, but that is all. Use proved methods to detect weather a wire has AC flowing or not.
That’s what they use to find out where (not) to drill on a wall. Moving it from side to side it shows a strong signal when it is right above a live AC wire.
I have one of these, it supposedly even detects wood?!!
“next step” could be to use a “signal injector” on one end of a line, and use such kind of detector to find out the right line among dozens others or so, identified by “beep”…
I have a cheapo like this from ELV, and it saved me a life (always being too lazy to document house’s wiring 😉
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