The "festival" was supposed to be Apple giving participants a list of elements and 24 hours to make a three-minute film about them, but after some unexpected server problems, the festival was postponed until after the holidays last year. The website is gone, and they are now saying that they are "unable to reschedule the festival as hoped," which means it's off indefinitely. The email also says that Apple teams "constantly seek new and better ways to showcase your artistic expression," and that there will be other "opportunities to participate in Apple creative festivals."
Unfortunately, they're no more specific than that -- it's unknown whether the problems last year are still going on, or if Apple has something else going down that can't conflict with Insomnia.
It's too bad -- it would have been great to see what kinds of films came out of the competition. But of course given what's going on with the economy and what's happening at AAPL, this was probably just the first corner cut.