YoVille will NEVER ask for your password, so please be wary of malicious emails and/or forum posts that request your password, including via web links.
If all goes well and there is no glitch once the whole event is over you will get a slot for each challenge entry you made. Last time there was a glitch and pretty much no one got their outfit slots. They fixed it and refunded what people spent on slots to save their outfits.