Re:The hard part (Score 1)

The challenge here is real-time processing of vision data to handle obstacle avoidance, etc

I agree it is damn hard to do the vision right in real time. You can do little about it. If I were going to participate in the competition, I will mount a 2-D laser scanner, e.g. those from SICK optics, to the autonomous car. These units are quite widely used in autonomous robot/ vehicle safety research. The laser is Class 1 eye-safe laser with a 0.5 deg resolution, 180deg scanning range. The updating rate can be higher than 60 Hz.

The catch is it is about $7k excluding the high speed data capture card... Unlike the robot wars, this competition is not exactly cheap to enter. Even less resourceful university research group will find that hard to fund.