I think you would end up with a better logo if you just did a call to your mailing list for designer recommendations, and paid a real designer $500 for a few hours of their work to come up with their best effort. By opening a contest, you're not only going to get a much lower quality of submissions, but in the end, the final decision is going to be made by you, someone "useless at anything artistic". Paying a designe…
That's a fair point... but I do know what Tarsnap is, and it's not exactly "typical". I don't know how many non-tarsnap-using designers would come up with something which is consistent with the rest of the "tarsnap brand".