PvP is a touchy subject in regards to this game. Some people are begging for it, because they seem to think that the height of what a game has to offer is to completely ignore 99% of the game's content and spend their time beating other players over the head in a contest decided entirely by who has the best gear. Many of us realize that Spiral Knights' wonderful player community, full of polite and trustworthy people, is solely the result of it NOT having a PvP crowd...
However, I think competitive content COULD work if it was presented in forms more resembling of a party game than a boring, mash-buttons-at-each-other-until-the-guy-with-inferior-gear-dies deathmatch. We could have an entire ARENA (spectating possible!) full of a wide variety of enjoyable party games, that are designed either so that which gear you use doesn't matter much, or possibly requiring the use of arena loaner-gear. Some possible event ideas to get things started:
Jelly-Herding: A coliseum full of jellies, but unlike the typical arena the goal is not to kill them. Instead, players or teams of players have pens in which they must LURE and TRAP jellies, attempting to get more than the opposition at the time that the clock runs out. Players would be given special melee weapons that do no damage but have regular knockback and cause aggro as if they did damage (or maybe the jellies just have an impossible level of health and health regen, so you'll be doing damage but it won't technically matter. As long as you can make them angry enough to follow you). and guns which are similarly ineffectual damage-wise but can cause stunning or freezing. There could be different varieties of jelly, some being worth more points but being more difficult to herd. Oh, and while you can't harm the jellies, THEY can kill you as easily as ever. Health restoration pads will be available behind each team's jelly-pen (perhaps with team-specific forcefields barring the opposing team) but waiting for health or having to revive teammates is time you could be spending herding those jellies!
Greased Wolver: It's a wolver, see... and you have to catch it. Unlike regular wolvers it will never attack, but it will try VERY hard to run away, dodge, maybe do some burrowing occasionally. Perhaps the floor will also be slippery. Each player is given a special melee weapon which does no damage but will secure the wolver in a cage once it has been struck a certain number of times.
Gun Puppy Dodgeball: A vast array of gunpuppies sits on the other side of a short chasm and launches a terrifying barrage at the players on the other side. The rules here are simple; you're each given the same arena-issued armor and shields, and the last one of you left standing is the victor. Difficulty will increase in waves, in which the gun puppies will be gradually upgraded to various types and healing items MAY or may not be randomly scattered around the players' side of the field.
Musical Floorspikes: A floor full of deactivated floorspikes. After a certain amount of time, MOST of them will pop up. The key to victory will be to spot those few sections that will remain safe. To keep players running around, there may be a couple of gun-puppies around the arena perimeter keeping things interesting... or maybe the spikes will continuously pop up in small patches, alternated by all-but-a-few-spots popping up every so often.
These are just a few ideas. I could probably spend all day coming up with more. i'm sure any of you could suggest more of similar nature (and I encourage it). Notice that all of the suggestions I have posed so far don't even INVOLVE attacking the other players, and that's because any such event where you CAN attack the competition would have to be designed extremely carefully. I could see some kind of events where you can attack the other players, but are only able to slow them down long enough for you to reach some other goal, but even THEN the event would have to be designed carefully or else you'd just have people constantly trapping some guy in a corner so that their friend can win unopposed, and that would be just as broken and anti-fun as any regular, boring deathmatch would be.
Great ideas but sometimes players just wanna get down and dirty xD