The purpose of a prospectus is to plan the paper you are writing. A prospectus should:
a) describe a topic and a problem or question that your research will clarify, and
b) identify the sources you will draw on to answer that question.
A good prospectus will make your topic understandable and interesting to others.
If you have trouble thinking of a question you want to ask, ask yourself how and why you became interested in the topic.
If you do a good job phrasing your question and figuring out why you want to know that, you are well on your way to writing an excellent paper!
(The other major hurdle is finding the right sources.)
Your prospectus should include the following:

1. Working title. This is more important than you may think. For now, you should keep your title simple and descriptive. As you work, an argument or thesis will emerge that structures your paper. Your final title may then resemble a book title, which is usually in two parts: The first is short & catchy, the second longer and more descriptive. For example: "Selling the Holocaust: How History is Bought, Packaged, and Sold," or "Shifting Memories: The Nazi Past in the New Germany." Such titles contain the main theme of the book, and may give some indication of what the author’s position on that issue is.
2. Description. A paragraph or two about the topic and your reason(s) for choosing it.
3. The basic problem or questions you will address. You should write out your central question(s) explicitly. State also any ideas you already have about possible answers to those questions. ("I want to find out why some doctors conducted gruesome experiments on human subjects. I think they were so fixated on their research and influenced by propaganda that they were able to convince themselves that their subjects were less than human." Or: "I think the German medical system taught them not to empathize at all with their patients.")
4. The approach you will use to answer the questions. This may be difficult for you to figure out, but you should give it some thought, and don’t worry about it too much for now. Think about the following questions: Where will you get your information? From diaries, memoirs, trial records, interviews, scholarly books, essays, newspapers, …? If your paper is based primarily on one scholarly book, where did that author get her or his information?
   Then ask: What will I do with that information? Will your study be based on a comparison? Will you be comparing similar things or different ones? Are you going to try to describe how, or explain why things changed over time?
5. Working outline. Try to think how you will portray your topic and present your argument, step by step, section by section.
6. An annotated bibliography. A list of relevant books you have looked at about this topic, and a short note describing what the book is like, and why you will, or may not, use it. This will enable me to help you find the best materials for your paper. If I suggested or you found a title that you haven’t been able to access, please note that as well ("checked out of library," "only available from interlibrary loans," etc.), so that I can help you obtain a copy.

The whole prospectus should take about 1-2 pages to write up.