When I began my subscription to DDO I thought there would be much more intereactive events than there have been. That being said, I would rather see dev effort go into fixing bugs and more content first; to me, live events are the icing on the cake.
IF you are going to have such events though, I think DKerrigan and ThEndor have made some great points. The events are designed so you WILL give the items away, this event seemed to miss that point.
If you want to offer an infinitesimal chance to get something (i.e,. a lottery), announce that you can gamble for unique items as a reward in the several taverns around town where they have the games.
But the many posters here have great ideas which all come down to - make the events MORE interactive. Some trivia is ok. Some gameshow is ok - just broadcast the show more so you can take "ownership" of their success or failure.
But mostly people want to use the gear they have acquired in the context of the game. Towns attacks, duels, dev appearances, hunts all go toward doing this.
The big thing to me though is that you need to make the events more regular. with a greater range of times - (e.g., more than one 1/2 hour time slot on each server). If people know when regular events occur - they will plan for them and you will have more participation. The unique give-aways, I would guess, are fun for the devs, a creative opportunity.
For example, the Festivus was great - but, to me, it implies it should happen again around the same time each season. Will it?
I would love to get a Sir Lawrence response to all the great posts in this thread - even to acknowledge reading them and weighing them for what they are worth. It goes a long way to know that the feedback you are soliciting is being read and considered in some way.