I would do something, we need to get ideas:

1)Remote box exploitation (server-side app written in C/Perl with multiple flaws)
2)Local box exploitation (rooting via modified apps/original apps)
3)Webhacking contest (special one - self replicating xss worm contest, i can get webapp and example worm for it, my friend already has it running)

4)Cracking challenge ( linux/windows app cracking)
5)Old exploit competition (if somebody can get win box running with something REALLY old - then we can find the old flaws and write our own exploits - this is fun...)

I agree with that rx-

Sure Xinapse.

if ya need help, just tell me. I should probably connect to the irc... ill be there in a sec