I think most people I know are into more of 1 on 1 roleplay. Most people join to test there skills against others, and after some surveying I found that people where not into the whole solo roleplay thing for the challenges. I think an admin or mod should be put in charge of a challenge and each boss should have more abilities and details put in so the mod or admin can play as that boss obviously you can enforce the rules as you have in the challenge area per challenge. Also if there are any dungeon like challenges you can have the admin or mod play through them like a text adventure game like Zork, the admin or mod describes the setting in high detail, than the challenger says what he or she wants to do.
Another suggestion tag teams tourneys as long with single man tournaments. The tag team would work as they would join another chat area for them with a password or something I dont know and they sort out their hole post or just have one side post and than the other which would work much easier. This could be for rank ups and maybe some A.C. I think this could improve skills by coordinating attacks as well as promoting more friendships and story lines to evolve, and maybe even tag team abilities and ranks!