I think this is a good idea because the frontpage changes so little and it makes all of WC feel inactive. I also love the idea of putting the award in the winner's award box.
However, contests have been featured on the front page before haven't they? In fact, I think one of my contests was up on the frton page for a little while, and it still doesn't get much action. I think it might have been Five Words, which certainly gets the most activity of all my 3 contests, but sometimes it still barely scrapes by for the month. I don't know, I would just say we should really try to make sure that it is something special and not just faux special. I think it will require a collaboration between the contest host and the theme creator/mod. I usually make a theme each month for my contests, and if one of them got up on the front page then I would need to know what to do for theme/time limit/etc.