It's not a literature review, but http://33bits.org/2011/06/06/the-surprising-effectiveness-of-prizes-as-catalysts-of-innovation/ does link to a McKinsey report on prizes, which ought to be good reading if their reputation can be relied upon.
It's funny you linked to my post on prizes, which brought me here, because I'm actually very interested in spaced repetition. In fact just a couple of weeks ago I mentioned it's potentially worth millions of dollars to me: http://arvindn.livejournal.com/132233.html
You guys need to get more rational about the value and importance of what you're doing in this community. You're arguing over trivial amounts of money here. I'd say that any post that's good enough to get voted up to the main page is worth tens of thousands of dollars to mankind. Easily.
I'm putti...
EDIT: I am canceling this contest because I feel that the structure of the incentives were poorly thought out (see gwern's comments). I will be posting a new better structured contest in the near future (now posted). If you feel this is unfair or otherwise feel slighted, please contact me at my username at gmail.com.
I'm interested in making projects happen on Less Wrong. In order to find out what works and to inspire others to try things too, I'm sponsoring the following small project:
I hereby offer a prize to the first person to submit a good summary of the evidence on Spaced Repetition to the main page. The winner will get the prize, currently: $265 + 40 to charity (see comments)
The summary should address at least the following questions: