Yeah, I think the key is having an investor who is willing to spend money in pursuit of a prize. In the Ansari X-Prize case, it was Paul Allen's money (co-founcer of Microsoft) that financed Bert Rutan's team. In the end, I believe Rutan's team spent more money developing their ship than they won in prize money (though conceivably they might make some of that back in selling rocket flights to rich people)

The ranks of the exorbitantly rich have been growing pretty fast of late. I'd speculate that these kinds of prizes, if appropriately set up and marketed, might spur some of them to engage in outsider science/engineering kind of like what Paul Allen did. John Carmack, developer of Doom and other popular video games, is also busily building his own rocket. Mike Lazardis, founder of RIM (the Blackberry people), is funding his own physics institute - that seems a lot less entertaining than building rockets or solving the oil crisis or whatever else they are rolling out prize money for these days.

Longitude is on my to-read pile, but it's pretty far down. Is it worthwhile?