In the Tablet Scavenger Hunt, you could win 10000 USD for pictures of the device, 20000 USD for a video, 50000 USD for Steve Jobs holding a tablet, and 100000 USD if you let Valleywag plat with it for an hour. This rather playful action felt more like old-fashioned mockery of the hype than like an actual, serious contest.
Apple, a company which you can't really accuse of having a sense of humour, didn't like the contest. They resorted to their usual tactic whenever something's in the press that they do not approve of: they start litigating, most often in the form of the infamous cease and desist letter.
Valleywag is taking it well, stating they have a winner in the competition. "Congratulations, Michael Spillner of the prestigious Menlo Park law firm Orrick, Herrington & Sutcliffe!" Valleywag writes, "Your 'Letter from Apple' demanding that we stop the Scavenger Hunt - specifically the line 'Apple has maintained the types of information and things you are soliciting [...] in strict confidence' - is the most concrete evidence (from Apple itself, no less!) yet that there may indeed be a tablet in the works."
Apple has a history of sending in the lawyers whenever the press report something they don't like. I have no idea if asking for information that is under an NDA (mind: an NDA is a contract between Apple and the employee in question - not Valleywag) is illegal, but apparently, Apple thinks it is (as it details in the letter).
In a sane world, Apple would have nothing on the bloggers or journalists publishing this information, since those bloggers and journalists did not enter into a contract (NDA) with Apple. Sadly, the world isn't sane, so I wouldn't be surprised to see if Apple was able to silence websites this way. They've done it before, but mostly through settlements.