I know of another forum, who themselves put up a competition where the users designed templates for the forums, and there were a lot of responses as a result, mind you he was giving away a years subscription and a vb Board too.
If you want a banner, you will obviously need to set restrictions, as a lot of people can work with it, and make it what you want it to be. However, you will need to specify size limites, content, file-types, etc - seeing as you would probably not want a 4mb flash banner/logo.
Anyhow it is up to you. With scripting, very very few people know it, and that is why and how you automatically reduce those who will enter into it - like redhead has mentioned already.
Doing a design contest will open it up - yes. I am with that, but there would be many restrictions that will make others think that there is no point. For example, it is hard to create a decent logo/banner with a size less than 12kb, which is moderate for a logo/banner.
Anyhow, like I always say, it is up to you, and you alone really, and it is your choice as to whether you decide to take in our views, and that is something that I totally respect.
However, I may take it up... if it is for a banner/logo that is,