This is really cool. I wish I learned about this sooner! Final submissions are in three days.
Basically you design a bot that plays a game called Planet Wars as intelligently as possible. Your bot is matched up against other people's in a huge tournament, and you are assigned a rank based on your wins and losses. It is actually Waterloo University that is running it, and Google is their sponsor.
Here's an example of 2 of the top 5 AI's facing off. There are currently 40,000 submissions.
http://ai-contest.com/visualizer.php?game_id=8512798