I've used Audacity before, for a free program it's pretty nifty!
I think you'll have too many musicians on your hands to give everyone fair playtime... How about getting a few groups together and seeing what each group comes up with? Doing it by genre seems a fair idea, since then everyone plays what they want to play :)
I'd put myself forward but I'm only really semi-competent at guitar, which is played better by many!