Hopefully i can help clear up some questions. 

First and foremost, the main goal for this contest is to make contact with skilled 3D artists.  We will be creating many characters for our company over the next year or two.  We have already paid about $20K to artists to create about 30 characters for us. I have personally spent about $2000 of our company's money to purchase a wide variety of the base character meshes, textures, clothing, hair, props, etc.  We have a much larger future budget to continue to create many more characters and enrich the artistic community.

We want to make contact with new artists and pay them to create characters for us.  The contest is one way we are doing this.  this is the first time Sarah and i have set up a contest like this, and we're doing the best we can.

If you visit our website www.humanityonline.com, you can see that we provide 3D hosts for websites (as our first phase of services).  So we are looking pay for 3D characters to animate for our customers.

With respect to copyrights, for each winner, we will talk with every related content provider to ensure their rights and IP are protected and compensated.  If anyone has specific, constructive suggestions about how to best do this, let me know!

For example, what specific edits to the rules would make them more clear?  We didn't want to make the rules too lengthy and lawyeristic, but if there is something important missing i will edit them.  i've already made two edits, based on feedback from the community. :)

I'm a 3D artist myself (not very good, but i'm learning ;-), so i totally understand and insist that our company observes all copyright interests.  One of the things i really like about our founder is that he does things right, and builds companies to last. you can see my awful, amateurish attempts here:  http://www.renderosity.com/mod/gallery/browse.php?user_id=165576

cheers,
glenn