I, personally, like your descriptions of AU vs AR. That is exactly how I would describe them. I would love to see these as the teams for 2008. But looking through others' comments, quite a few people don't see it as simply as I do. As a reader, I love both. As a writer, I have done AU and have an idea for AR that I would like to write. As far as readers not liking AR, there are plenty of people who don't like Angst or Post-War, and both of those fests went really well. I think it is the challenge behind the assignment that makes a fest what it is.
I do think we should keep the authors and the artist games separate. Actually I like the way the games have been going, with the authors in the spring and the artists in the fall. If you do one big game, they should be posted separate. I don't like the idea of collaboration. If you do it, it should be randomly assigned partners and the fic and art should be posted separately, with the art referring to the fic in the notes. As a reader, I may like the story but not the art and vice versa. It would then be hard to put a worthy vote on the entry. Keeping them separate gives better voting quality for both art and fic. As a writer, I would rather be assigned an artist. I am a lesser known and lesser experienced writer and would find it hard and daunting to pair up with an artist. And I would still like the fic and art to be posted separately.
This next I am torn: As a reader, it doesn't matter to me if the entries are anonymous or not. There's no recipient to hide from and I will still read all of them and vote according to quality not popularity. But as a lesser known writer, I think I would like to be anonymous until the end of the fest. I feel that most readers would give me a chance that way.
As for length of time, as a writer I would want as much time as possible. I sometimes hit a week of writer's block before I get back on track and I certainly wouldn't want to panic. So twelve weeks or more sounds good to me. Also, if you do collaborations, this would allow more time for the artist to do their renders of the author's work, since most or all of the story needs to be written. Unless the author is writing in response to art, then time will only need to be adjusted according to how the artist works to get done.
If you do one big game, I think July would be a good month. And I am not sure about the max and min for stories or let them go wild. I think actually it should be one piece of art for each fic. Let's say one author writes a long story and the artist does three pics. Then another author writes a shorter story and there is only one pic. Seems unfair in the artist part of the games. One fic per author, one pic per artist, I say.
And giving prizes for comments? I think you're asking for a major headache there. How do you propose going through all the comments, hundreds and hundreds would appear in a bid for a prize. And would it be by number or quality? How would you rate the quality? And would a commenter be sincere in their comment or would they just post something in order to gain a prize? As a writer, I would rather have a few sincere comments than a bunch of simple non-sincere ones. I would advise against prizes for comments.