When I ran my first game, my prize matched the theme, of Adventureland items. The prize was the Karo tiki chair, which was 100 credits the first time it was released. (I haven't seen the price on them since they came back.)
I remember during that time, someone told me I had cheap prizes, and someone else was giving magic pins as prizes. Bless Disvaclub for telling him that he should leave and don't let the door hit him on the way out.
You will find ungrateful poopyheads who play the games, but more often than not, you'll find some really polite people who enjoy playing the game. And don't be afraid to boot anyone rude.
When I ran my Halloween game last year, I had used the pumpkin bags and spider dividers as prizes. But, I actually had an advantage using a quest kiosk to distribute prizes. Since you can't do an open quest more than once, it stopped repeat winners. I made sure I had an exit teleport for the non-winners (it sounds obnoxious to call them "losers"), and I placed a Tron teleporter down for the winner to get to my kiosk room. (I set up the Skull Rock room I had, because it was extremely easy to block the entrance to those who might follow the winner to my prize kiosk.)
But I have seen people give out cheap pins and such as prizes, and I see nothing wrong with that. I am a believer that nobody should over-extend themselves spending their hard-earned credits on prizes if they can't afford to give rarer prizes away. I still have both my game room and prize room up, and I wonder if I should open it up again.
I'll tell you about my game when I open it again! 
