1. A design contest thread for submitting works in progress is fine, if you feel like showing your hand early and letting competitors know the direction you're taking. You lose the element of surprise ;)
2. There are no guarantees #2 and #3 will always be available for the design battles, plus as LamboMan suggests you risk a very small group of frequent participants.
3. Leaderboard sounds ok; we had one a while back, not sure when we stopped keeping track.