I heard about this contest from Michelle's blog. It is being hosted by Lotus Knits! and entry is pretty simple.
Here are the rules:
1.) post a picture on your blog of your first finished knitted item OR what's next in your queue that you *haven't* cast on for yet and
2.) make sure to mention this contest! Scarf, dishcloth, sweater, whatever! I wanna see! Then,
3.) email me at email@example.com (or leave a comment) to let me know you've posted so I can come check out your blog! Let me know what blog you saw the contest on, because for every person that mentions your blog as a referral, you get another entry into the contest.
For me, choosing the next project is a bit harder. I constantly have hats and dishcloths on the needles for the craft fair, so I hardly want to count those. However, I am planning to knit a hat for Caleb from some yarn that we dyed with Kool-Aide together. (The colors are awful - but that is what you get for letting a 4 year old be your artistic director.)