NY Times on Heinz's "create an ad for us" YouTube contest gone not quite as expected: "Companies have found that inviting consumers to create their advertising is often more stressful, costly and time-consuming than just rolling up their sleeves and doing the work themselves."
I don't think it's about agencies wanting free ads. It's more about brands trying to open up to participatory culture and letting fans into the institutionalized part of the meaning-making world, but the YouTube tool is often way too blunt for the purpose. It's also a convenient short-cut: "Hm, so how to we let people interact with the brand? Oh, why, let's do YouTube." I still don't understand why the contests should be about video. How many "user-generated" print campaigns have we seen besides Nikon's?
Anyway, YouTube has a special contest page; there you'll find Samsung, Cingular, TaxCut, among others.