Overlays definatly count as textures, however I think we'll do a competition for normal wall/ceiling/floor textures and then at a later time one just for signs.
What file types does VTF edit accept when it turns them into VTFs? I don't use it as I have PS and the plugin for it but if that only accepts .TGA files like I think then by asking for VTF files only we can eliminate anything made with paint, because lets face it, if it was made in paint its not going to be very good.
If and when I get a proper contest thread up I will include as many links to existing tutorials/references/useful programs/etc as posible to make it extra easy for you lot.
Those with graphics tablets like myself have a big advantage with the painterly effect but I'm sure its posible without splashing out on a tablet, I'll and find a tutorial on paintbrush stokes if I can, if not I'll try and patch something together myself (It won't be fantastic if I do though)
Watch this space I'm 95% certain we'll at least set up a texturing competition in the next week or so