I love challenge caches! They often give me ideas for my caching plans and make me look for specific caches when I'm out and about, rather than just getting the numbers up (Unless the challenge is about numbers!) Not all the challenges are for me, however, but part of caching is recognisimg your limits and staying safe within them. For example, just because a challenge asks for 10 caches of D/T 5/5, it doesn't mean that I HAVE to do the challenge or that it shouldn't be allowed just because I myself don't want to do it. Different strokes for different folks.
I don't think that a new icon is neccesary as it is more an attibute than a different cache type. Chirp caches don't get a different icon, for example, jjust an attribute; they're just a different type of traditional cache. An attribute would make them easier to search for too, as not all of them actually have the word "challenge" in the title!
However, I do wonder whether there should be a ruling that you shouldn't place a challenge that you don't qualify for yourslf. I sometimes wonder about some of the more extreme challenges!
Currently, there is nothing to stop anyone from finding and logging a challenge cache if they don't qualify. Not sure there's a way around this unless a Geochecker type thing can reveal the coordinates only when you've qualified?
One last point- most challenges tend be quite, well...challenging! How can we enourage people to place challenge caches that appeal to more poeple, especialy to newbies or occassional cachers? For example, find 500 caches in total; find a cache on every day of the week; find a cache for 10 consecutive days.
Happy caching!