Peter, the name is jokingly stolen from the Pillsbury Bakeoff (an actual baking contest, still running as I understand), but the principle is simply that you send in your best work of the type being judged (light verse, sonnets, translations, etc.) and the screener picks a group of finalists to be posted anonymously, on the Distinguished Guest board, on the stated days.
Then the judge comments on each, and the assembled masses do too, often trying to guess whose poem each is. Finally the judge picks his or her top three and the group votes for its own favorites.
You might look at the recent Translation Bakeoff threads on the DG board to get an idea.
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