My immediate thought is "here we go again", but I am actually really keen to enter a community jam/compo if it's properly put together. We seem to have one a month that pops up by a well-meaning but utterly unprepared forum member, usually a fairly new one, and things start falling apart pretty quickly. If we can get a few of the more well-established members, like yourself, heading this thing, then I think there's every reason for it to be a success.
I'll chime in when it comes to format: Despite my every intention, I simply don't have the kind of free time needed to do a jam, at least not the sub-72 hours ones (which is most of them, really). If I've got a week or two to put together something in my evenings then I'm far more likely to enter, or to even take notice in the first place.
I think that winning, or motivation to win, is important in competitions, but I think the idea of judges wouldn't work. I only mention this because it always comes up sooner or later. I'd much prefer a public voting system, but the less time I have to spend faffing on Facebook pages, other forums or obscure websites, the better. I think everything should be contained within these forums as much as possible.
The specs and rules should be up for public discussion, but ultimately a few highly experienced users should make the final calls. Otherwise we'll be stuck discussing them for months.
On that note, I'd like to recommend competition specs that limit the colour palette and screen resolution. If we're going arcade-style here then having that retro feel is be essential. It'll also speed up artwork generation for most people, as slapping together some simple but effective pixel art is something most people can do in a short amount of time. I also think input should be limited to keyboard and/or gamepad.