Matt Ziser showed me Threadless a few years ago while I lived in Chicago. I've loved the concept ever since. It's a site that allows users to submit t-shirt designs. The community then votes on them. The designs with the highest votes get turned into t-shirts and sold from the Threadless site and store. Elegant and efficient business model that is all based on participation. Here's a video interview with the owners of the company.
This video comes from a blog called Horse, Pig, Cow.