The HKUST CSE Dept. requires that you include a Literature Survey or Critical Review in the introduction of all FYP proposals, progress reports and final reports.
The value of a Literature Survey
It shows that you not only understand what you have done, but you understand what others have done related to your subject - the broader context. Brilliant people with PhDs have already done lots of work on your subject. If you can tell people about what research has already been done and what methods already exist, then your readers will think that at least you are interested in your topic, have some self-initiative and are informed and up-to-date.
It shows that you are intelligent enough to evaluate the quality of the other work done on the subject, i.e., it shows that you are capable of thinking critically and identifying strengths and weakness.
It gives you opportunity to tell how your project is related to previous work done by others on the subject.
It tells the reader if you are simply going to duplicate others' work for the sake of gaining a better understanding, improve upon others' work or perhaps combine the methodology of two or more existing approaches to solving a problem.
Tips for Writing a Literature Survey
BE A HUNTER! Go online and search for articles, books and papers related to your subject. Be creative and persistent in your keyword search until you hunt down good references or examples.
Ask your advisor for recommendations (but don't totally rely only on these!) When you read some literature that you think is useful and related, first record the citation on your list of references, using the IEEE Citation Style.
When you read some literature that is not very useful, do not include it on your list of references. More references do not mean a better list of references. Useless references only confuse a careful reader and make you lose credibility.
In each document, identify the approach(es)/method(s) for solving problem(s), and compare this/these with what you already know.
Identify which approaches and/or methods you will use and omit in your FYP.
After you feel satisfied that you know all or most of the existing approaches/methods, for each one:
List out all the approaches/methods, in a logical sequence (perhaps in chronological order), including both those you will use and those you will omit
For each approach/method:
Describe how it works and what its components are
Tell what kinds of problems it is good at solving
Tell what kinds of problems it is poor or limited at solving
Mention other strengths and/or weakness of each approach
Tell if you will use or omit the approach for your FYP and why or why not