VMware Ultimate Virtual Appliance Challenge

VMWare/Challenge:

VMware invites you to put your skills to the test, go head-to-head with your peers, and develop the best virtual appliance the industry has ever seen. Using open source or freely distributable components and/or your own code, create the most inventive and useful virtual appliance.

There are some interesting appliance examples on the web site, check out - Browser appliance, Security Appliances, Voice over IP Appliances, FreeNAS (free Network-Attached Storage server), Squid (full-featured Web proxy cache).