|photo thanks to HackNY and Flickr|
I've organized hackathons, and participated in hackathons organized by others.
In my opinion, following Alan's advice about actions prior to hackathon participation and post participation as well would have a "chilling effect" on hackathon usefulness and participation.
Hackathons aren't just for "relaxing" - successful hackathons are full of energy and dynamism, and result in energized people who've learned new things, sharpened their skills and maybe met some new people. Participating in external hackathons should be recommened for employees in software dev firms as part of professional development.
The IP issue is more complicated than Alan represents, as well. Many hackathons are sponsored, and in some case the sponsors have their own agenda. People need to keep their eyes open to this as well.
If there isn't already, there should be a basic hackathon bill-of-rights that hackathon organizers should share with participants about IP guidelines, if it is an issue for any reason.