Undergraduate researchers and time

Although I've supervised many undergraduate researchers over the summer, both at ProdigalU last year and at National Lab before that, this semester is the first time I have a student doing research for credit during the academic year. My undergrad seems sharp, and has a good class schedule for research, but I don't see this person in lab much. The project has only been running for a month, and there was an initial report due, which required lots of background reading. I have to admit, though, that right now I am a bit underwhelmed by the commitment level of the student.

I realize that this particular student will require a whole lot more oversight than my summer students, especially since many of my summer students came in every day vs a few times a week due to their class schedules (and lack thereof). This is something I don't want to put on the grad student who is supervising the day-to-day lab stuff. So I clearly need to bring my undergrad in for a chat about expectations, but since the "official" time alloted for student research is only 10 hours per week (curse the credit system!), I am thinking hard about how to approach it.

Ideally, I want the student to be able to complete a (small) project during their time in the lab, which is what I have done in the past with my summer students. I just don't think it will happen with 10 hours a week. So, do I start using the student as a technician in support of my grad students rather than a "researcher"? Do I keep the student on the current project knowing that decent progress is unlikely with this time commitment? Do I change the project to something more amenable to 10 hour per week bites, even though I think it will be a worse overall experience for everyone involved (including the supervising grad student, who is getting a chance to mentor someone with supervision)? I do plan to explain all of this, and then make a decision based on the student response. Any other suggestions?