The problem with sig and AMV contests is the barrier it imposes on a lot of the members of the community. Generally, sig contests don't work when half the would-be entrants don't have photoshop (or equivalent). Suddenly, someone who would have participated in some unknown upcoming event has to overcome the hurdle of the amateur learning curve. Instead of, "That might be fun," you get, "I have to learn [program] in order to even try, and a lot of people already know it, I better not bother." It wouldn't be a problem if everyone was on a level playing field and had to start from the beginning, but in cases where the contest is evaluated by peers on a quality basis, those with experience will win out.
AMVs are just that much worse.
The reason GW: Survivor was successful was because the events were so stupid and accessible. Write a Naruto filler episode is something anyone can do, editing images with MS Paint (or Apple/linux alternative), etc.
The key to creating a good event is accessibility. You want everyone to participate, and be capable of participating. Not just those with countless hours of experience under their belts.
Keep that in mind while thinking up events.