For a project like this I would recommend a Kydex sheath for aesthetics. Its a futuristic combat blade why not go with Kydex and make a futuristic sheath. I can provide you with a great web site that has some great tuts with Kydex.
As for leather, there is a problem when dealing with Carbon steels and leather. If you leave it in the sheath for long periods of time the Chemicals in the leather tend to corrode the blade no matter how oiled it may be. So if you go the leather rout you may want to make a wall display for the blade and sheath and just keep it oiled and out of the sheath.