It's a good idea. I felt like we were in a dead period, not many good releases, people are waiting for their gcw0, maybe things would start growing up.
I myself would like to code some new project for the GCW0, just busy with other stuff right now, but a contest would motivate me to start with something. I will even think about contributing a little bit to the prize.
I am more interested in apps/games category, although it wouldn't be bad to have an emulator category, maybe good stuff will come out of it. I remember we had this discussion before whether emulators or ports of games/emuls/apps should be allowed. For me, just have separate category for these.