Here's my two cents:
Over 1,000 words, and under 10,000 words. You can do a lot in 10,000 words, but that'll force the more long-winded challengers (i.e....ME) to condense themselves, while forcing the shorter authors to reach outside of their comfort zone.
It should be a one-shot. You're right that any challenge shouldn't be a novel; what you're after is a snapshot moment. It should aim for a T rating: That means no outrageously gratuitous violence or christmas cake moments, but leaves the challengers enough wiggle room to not have to change how they'd normally write.
On a personal note, I'd love to see a challenge that DOESN'T use the five main characters (Jake, Chance, Felina, Callie, Feral) and forces the authors to dig deep into some of the tertiary assortment. This might inspire quite a lot of "Villain fics", but it's a livable consequence. Everybody writes about the main five. I'd like to see how the writing community here can hack it when you take away the most obvious toys.
Beyond those things, I'd say you don't want or need any further stipulations. This should give the ideal mix of difficulty and fun necessary.
What were you considering as a prize for this little contest? Personally, I'd love to have some cover art from Ty-Chou for "Foundation of Trust" and "Transitions", but there's also the matter of balancing the contest's prize to the effort put forth in reaching for it.
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P.S: Who did you have in mind to do the judging, Modad? And what criteria or grading scale are you going to use? If it'd help, I'd be willing to step aside and be a judge for this...unless you were going to ask the other Mods to do it for you. In which case, I'm in it to win it.
-Erico
). Things like story length, amount of time to write, etc. are probably important to work out. 
Or a five minute segment of MadKat at an open mic night for a comedy club Ringtail was boo'd off the stage for so he would get his vengence in joke form. 
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