I think the X-Prize idea appeals to the American lottery mentality.... the fantasy of getting fabulously lucky. It also appeals to the movie mentality that one big idea can change everything, or one great person can make all the difference. Most important advances come from lots of people having lots of little good ideas. Most advances are (horrors!) social inventions, and emerge from communities (are we allowed to use that word in Amerca?) of engineers and tinkerers pushing existing (not revolutionary) technology forward.

A functioning patent system should reward them by giving them limited monopoly rights... that's the X prize for everyone... (yes, patent lawyers aren't cheap, but it's more democratic and more practical) rather than one big prize for one big idea. The patent system more closely matches how technologies are created and brought to market.

The X prize idea sounds like one more example of just how dumb the average American is, always ready to believe in a fabulous pot of gold at the end of the rainbow waiting for the one big man who make the heroic journey to discover it. It is designed to sound like a solution to the average Joe. Nothing more. It is not how the world usually works.