I like the concept of writing challenges, especially short ones that won't take people long to write. A review exchange is also a great idea. :] Rather than a whole story for a whole story, just a chapter for a chapter would be good (then obviously they can keep reading if they enjoy it).

I think you could turn the Stories Idea Lounge into an Idea Louge/General Chat and then when people post new chapters, they could always post in there instead of having it as a separate thread. :] We did this on Pe2k, if I recall correctly. Just a multipurpose thread.