It's called the OPEN Pandora, and that's not because the hardware is open (which is not the case). It's because the software side of the project is Open, which means you can pretty much do with it what you want, no DRM stuff or other kinds of chains. That freedom of course includes the freedom to create and release closed-source software with or without copy-protection or other kinds of DRM. But in my opinion, that's not really the spirit of the project, and I think it's a very good idea to demand the sources to be released. As foxblock pointed out, this requirement could be too weak, and perhaps it's best to add an additional rule saying that the license must at least allow the source to be used for porting to other platforms.
About the judging: perhaps the best system would be a mixed jury/community vote system, in which both count for half of the points. The jury would of course also consist of community members, but in return for their vote getting more weight, they would have to promise to test all submissions in quite some depth, and maybe even have to motivate their vote with an explanatory text or small reviews. The jury doesn't need to be the same for all 4 categories. And of course you can't be in the jury if you submit something in that category (but you can still vote in the community vote).
About the judging: perhaps the best system would be a mixed jury/community vote system, in which both count for half of the points. The jury would of course also consist of community members, but in return for their vote getting more weight, they would have to promise to test all submissions in quite some depth, and maybe even have to motivate their vote with an explanatory text or small reviews. The jury doesn't need to be the same for all 4 categories. And of course you can't be in the jury if you submit something in that category (but you can still vote in the community vote).