iPhone 4 5 Megapixel Camera!
What's always amazed me about the world is that the average person is never likely to travel the world. So, a great idea for a contest would be who could take a pic (or video) in front of something in their neighborhood. But, it can't be any old picture, the person has to be doing something cool, like pretending to eat a building or holding up a monument. Whoever has the best one and most creative wins! That way, those of us who don't get to travel get to see different parts of the world!

I know I'd like to see different places and meet great people from all around!
Another Idea: Whoever can come up with the best Movie using the 5MP Camera with flash and iMovie for iPhone. Or, whoever can create the best picture using Photoshop Express and only the camera (No Flash).