That sounds like a good idea. I think rookie, advanced, and pro levels are good to a point. They should say which level they want to join. Some people could say they suck and do really well or vise versa. So I figured, if you are good and you win(after a certain amount of times) you get bumped to the next level.
I also think that every word should be different to keep everything real. Some people have weaknesses on certain letters and the such.
I'm still in favor for whoever has the most votes wins, and if there is a tie, have a tie breaker round with a new word.
The winner of a category should get something but whos goin to fork out the money for that?
Thats my option.