Smart Chess-board (possibly using RFIDs?) I'd like to make a chess-board with the ability to detect the position of each piece.

The solution that occurs to me would be to put an RFID reader under each square and put RFID tags on the bottoms of each piece.

However, apart from the obvious cost (64 readers!) I'm concerned that:


Maybe RFID readers are too large for the squares of an ordinary chessboard
RFID reader range is too large, so a reader might pick up pieces on neighbouring squares
How the hell would I connect 64 readers anyway? Could an Arduino handle it? 


So, questions. 

Is this just stupid? And is there a better technology to use for this kind of application?

If RFIDs are basically a sane solution, what are the issues/suggestions? E.g. which RFID readers should I go for? (Based on size, energy, convenience for this application). What boards would let me handle this number of them?
As I read your post an idea came to me that must be obvious in its simplicity.  Since a chess board has pieces already on it we can simply use hall-effect sensors (dirt cheap) under each square and each piece has a magnet at its base.  Since pieces on a chess board move from one square to another and the initial position of all pieces is known/constant, the detection of a move would be that a piece is lifted from the board (hall effect sensor detects a magnetic field removal) and a piece being placed on a square would be detected by a hall effect senor addition of a magnetic field.  We wouldn't know which piece is placed on a square but we can calculate it by remembering what piece was lifted and it can only be the piece that was placed.