Perhaps those that have won a battle should have one free pass to a tournament. Would spice the map battles up a bit.
Then I think that you should have a single elimination from start to end. No need to drag this out a year 'cause then some ppl will drop out half way through due to real life issues. Might happen any way but why make the risc bigger?
That is 4 matches in a tournament and that could take up to 2 months.
First match: Two Rooms
1 week
Fitting for a first map in a tournament. Rules are simply to make two rooms and perhaps a hallway. Sounds pretty simple? In a competition, I think not!
Second match: Beauty and the beast
2 weeks (and what is left over when you are done with the first one)
Bring together something beautiful and something ugly in a map. Could be a garden with a broken oiltank. You get the point. This tests the mappers skill in drama and atmosphere as well as creativity.
Third match: Pushing the limits
2 weeks (and what is left...yadayada)
Simply put you want the audience to go "can that be done in the source engine?" Make it big, realistic, inventive, techincal, scary...anything that ordinary players don't expect you to be able to make in hammer.
Fourth match: Let's play
3 weeks (...)
Make a playable map. Setting to be announced about when the third match starts so you can't just take a map you've already made. The winner is the one people enjoy most to play on. This needs several servers to put both maps up and have players vote on what map is most fun.
In all these you could opt to have a special requirement announced at last moment that hinders anyone to start in advance.
About price and prize. For those that havn't won a battle you could charge a small entrance fee, like $5-£15. I would preffere the $5 since I don't think it is needed to get a prize. Easier to get a company to sponsor with a graphcard, mouse, headphones etc. etc. Talking to those companies ain't that hard and they are often interested in sponsoring in exchange for some advertising, newsposts and mentioning during the competition. Also they often loves the oppertunity to be connected to a winning entrance. Let's say you manage to get a really beautiful map done during the competition, something out of the ordinary, and a graphcard company gets the ability to say "look how good it looks in our new graphcard"...that's often enough since a graphcard doesn't cost them that much to give away.
Regular map battles should definatly go on if you give the winners a pass into the next tournament. That hinders those that are already in the tournament from winning this free pass as well
And about deciding on the winner, I think that a combination of jury and public is a good way to go.
5 jurors have one point each and the public have 2 points. That is, if it's 3-2 by the jurors the public decides. It's important that the jurors aren't deciding together.
I think this covers all you asked for?
Tomas