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Replacing a Windows Embedded Student Challenge run by Microsoft in the past, the Imagine Cup's key "Embedded Development" category asks teams of three or four competitors and a faculty mentor, to develop an entry addressing the 2010 competition theme, "Imagine a world where technology helps solve the toughest problems." Up to 15 winning teams will receive a free trip to Warsaw, where they'll present their devices, competing for a $25,000 first place prize, $10,000 second place prize, and $5,000 third place prize.
We'll provide further details of the Embedded Development Competition, which is now entering its second round, later in this story. We'll also list the other existing categories in the Imagine Cup.
Meanwhile, Microsoft has added six other "Awards" to the Imagine Cup, providing contestants with even more ways to win. It's possible to win one of these awards, all of which relate to software, without being entered in the other competitions, the company says.
New Windows Phone 7 award
The Windows Phone 7 Rockstar Award challenges contestants to create Windows Phone 7 apps using either Silverlight or XNA. The applications "need to be designed with the consumer in mind and should be as visually compelling as possible, Microsoft says, adding that entrants should "be prepared to demonstrate your team's app entry running on an actual Windows Phone 7 device or in an emulator." (Since the contest terminates in July, we'd guess that in practice, the emulator will be required, as described here.)
Microsoft says three teams will win Windows Phone 7 Rockstar Awards, which will include a Windows Phone 7 device for each team member, plus first, second, and third prize awards of $8,000, $4,000, and $3,000, respectively. First place teams will also get a paid trip to the Imagine Cup finals in Warsaw, the company says.
The five other special Imagine Cup rewards are as follows, according to the company:

In the second round of the Embedded Development competition, which has just begun, 147 teams received Windows CE 6.0 R2 and Visual Studio 2005 Professional, along with DM&P's eBox-3310A-MSJK (right), a compact PC that includes a 1GHz MSTI PDX-600 (a version of DMP's Vortex86DX), 500MHz Via Eden processor, 256MB or 512MB of DDR2 RAM, and a Type II/II CompactFlash slot. Teams are free to add equipment or additional software, but use of Windows CE 6.0 R2 and the eBox is a required element in the competition.
According to Microsoft, twenty finalist teams will receive round-trip air travel to Poland, hotel accommodations, and select meals. In Warsaw, they'll present their Windows CE-based devices via a series of 20-minute presentations, vying for the total of $40,000 in prizes detailed earlier in this story.
Further information
In addition to the Imagine Cup competition for students, Microsoft offers the embeddedSPARK 2010 contest for academics, hobbyists, and developers. Launched in September of last year, the 2010 version of the contest is asking competitors to use Windows CE in a "fun and games" device. On Apr. 9, three finalists will be announced, each of whom will receive a paid trip to ESC Silicon Valley at the end of the month. For further details, see our earlier coverage, here.
For more details of Microsoft's Imagine Cup 2010 and student contests, see the company's website, here. Information specifically about the Embedded Development category may be found here.