Just semi-hosted a hackathon recently. Key elements:
- good desks / places to sit and code
- reliable internet
- free dinner, midnight and/or 3am food
- healthy food in addition to junky food
- some like energy drinks
- don't have people pitch their ideas
- have an official wiki for people to post their team+idea
- tell contestants your judging criteria before the hackathon starts
(and make sure judges know it)
- keep presentations speedy, with a gong to keep people honest
(<5mins for final demos)
- have a nice big central room for everyone to code in
(don't spread people out across the building)
- don't require judges to give feedback after each demo
+1 for reliable internet. One dinky router is not enough to satisfy 200 hackers. I've been to half a dozen with internet issues and it destroys productivity. Even with iPhone tethering, if we had 200 tetherers the cross-interference would make it just as bad.
In addition to internet though, do not forget adequate power - electricity.
+2. At a hack day I was at recently, it took the guy next to me 10 hours to install Git (from source), Ruby (from source), download some gems and get Rails running because the bandwidth was so in and out. His bad for not coming with a properly set up machine, but still..
First, the answer is an absolute yes. Hackathon would be great. I would rather do that all night the first night than go to a party (realizing, of course I just posted this on the internet, and now look amazingly lame). I think the two most important things are internet access (which you have covered) and good working space - for example, folding tables, chairs, and powerstrips are more than fine (in fact, we can bring our own of the later), but places we can sit next to each other will be key.
I think that Launch wouldn't be complete without a hackathon. What you'll need is enough Internet connections to let everyone who wants to get in have their own, and LOTS of pizza and energy drinks. Perhaps you could persuade a local pizzeria to throw in pies for a sponshorhip. Also, the winning team should be able to present their idea on stage. Do this and you'll have a great hackathon in addition to a great event.
It's not a question of being able to afford it(I assume you could give everyone who attends the entire conference a pizza and still have $ left over) it's what would be most effective for the most people. If you get a local place to do it for you you'll not only save on the cost of pizzas(more profits to invest in the winner of the event) you'll give a local place some much needed attention. Plus, since a lot of people who will go to the hackathon already live in the area, they'll get quite a few new customers as well. And if that's not a win-win, I don't know what is.
-- Reliable Internet is important: I was at SuperHappyDevHouse 42 in San Jose last weekend and the wireless was slow... really.. slow
-- Energy Drinks: Rockstar and Red Bull!
-- Ice Breakers: It's great to have a bunch of people there, but it would be so much better if there was a timeout in the main room and we did a simple "get to know you"