Personally, having a plan of attack for my plot is a must. One novel I tried to write ended up in a rut because I decided I wanted to do something brilliant with my plot, but I couldn't, because I hadn't set it up right. So I had to backtrack to rewrite part of the story. But that part was so ingrained that I had to fix things all throughout. In the end it seemed easier to take my plot in a different direction and leave things the way they had been set up, which meant dumping my awesome new plot idea. Brainstorming in advance of the writing will hopefully help avoid that.

That's why the outline challenges. I had a question in email about how to do the outline, and let me tell you what my response was: Just kind of a plan of how your chapters are going to go. Start with the premise, which is on day 1. Then figure out what's going to happen to your protagonist, and when in the story. Build your climax and resolution. Then plan your beginning. Eventually, you'll have to fill in the gaps. It doesn't have to be a formal outline, like with Roman numerals and things (but it can if you're the super-organized type and want it to be.) It can just be a few paragraphs, or whatever format you're comfortable with, that basically says, I'm going to start here, then go here, then this is going to happen, the this, then the big climax, and it will get resolved like this.

Also, if you can use anything that you write during the Challenge in your novel, that's fantastic! I would still aim for 50,000 during the month of November, because that is the NaNo challenge. You could always change your personal target, too. The NaNo site won't show you "won," but if you set your target here before Nov. 15th, you'll still be eligible for the Merit Badge. NaNo can be personalized, in my opinion, since you're not competing against others - you're setting a goal for yourself and trying to achieve it. Bottom line, if you produce a novel in the end, you've won.