Matthew,
I agree with Nickao's comments identifying many issues and problems for consideration. He identified a lot of good issues to be concerned with.
Absent a random drawing in which all mwmbers who submit a written description of their project along with a photo (which I cannot do at present), there is a huge two-fold problem: 1) is setting the criteria to be used to select a winner and 2) is judging which submission best met those criteria. How do you assign / scale values to creativity, if that is among the criteria? Since the focus appears to be on NEW ways to use Festool products, judging the relative amount of creativity seems to be key.
Have you considered how Fine Woodworking judges reader tips and awards their prizes? Do they use a jury of their professional woodworkers who regularly contribute articles to their magazine? Should FOG select a jury of professionals to act as judges? Would professionals who participate in FOG be willing to act as judges? I note the value of the FW prizes is considerably lower than any new Festool product.
I also agree with Nickao's concern that a prize might cause people to hold back until they can present their ideas in a form that makes them eligible to win a new Festool, turing cooperation and sharing into competition and a focus on self. I have seen this operate in the business world many times, where people hold back their ideas until they leave their present employment to go into business for themselves or to impress their new employer. The bigger the prize, the more likely people are to focus on what can become personal gain.
It might be possible to create a list of criteria including creativity, usefulness, etc. and through voting of a jury (of professionals or all FOG members) assign numeric values to each criteria, and the winner would be the entry with the highest composite score. Some ideas will be extremely creative, but perhaps not very useful to many others on FOG. Car and Driver Magazine uses this approach when judging cars included in a comparison test to arrive at a final ranking of the cars. Note that different criteria may be assigned different weights in determing their contribution to the the overall score.
Dave R.