This is such a fun idea. I unfortunately can't "confirm" I will enter as I am busy with work and 2 grad classes although I'VE GOT IDEAS THAT NEED TO HAPPEN FOR THIS!!!
I'm an art teacher and traditional animation grad student so I'll offer my 2 cents for the contest, take em or leave em of course. First, character design and environment design feel like two separate ideas or contests. Also, I would give at least 2 weeks, maybe even a month for a character design contest, maybe allow for work in progress submissions to get feedback from the community, then have an official voting period at the end using what ever final images people make. You could do a front page ad to let people know about the contest, then post a front page thread for the voting once all the submissions are in. Lastly, If this ends up being both character design, and environment design, I would do a month at the LEAST.
Man, I'm going to try hard to get at least one design in for this, although I have two characters in mind that I want to do!!!