Austin is definitely a hot sauce kind of town. In fact, when I go out to a Chinese restaurant, I half expect someone to bring out chips and salsa while I'm browsing the menu.
Little wonder then that Austin has had a festival devoted to hot sauce since 1991, or that it's grown into one of the world's largest.
Organized by the Austin Chronicle, the festival is held at Waterloo Park on 12th and Red River (see map below) and draws around 15,000 attendees and 350 or so entries across three categories: Individual/Homemade, Restaurant, and Commercial/Retail.
The event is "free" with donation of three non-perishable food items or cash donation benefiting the Capital Area Food Bank.
Other Restrictions: Basically no dogs, weapons (other than Habenero Peppers), coolers, or your own beer (water and beer will be sold by vendors). You are allowed blankets and lawn chairs, however.
If you are interested in entering the hot sauce contest, please note that you must prepare your concoction in a commercial kitchen - see official website for information on how to go about doing that.
Also, registration is possible on the day of the event, but you're obviously going to be better off if you take care of business ahead of schedule.