The SXSW extravaganza in Austin has been an application king maker for the last two years at least; Google's Dodgeball blew up there in 2006 and Twitter went from elite-chic to massively popular there in 2007.

Who's it going to be in 2008? We look at five possible contenders below, taking into consideration the special magic that is the SXSW experience. Lots of startups are hoping they'll go big next week in Austin, but in all likelihood only one, maybe two, actually will.

Why SXSW?

The event is huge, it's filled with creative people, the weather is warm and there's lots of parties. The panels are good enough to comment on but not so good that people aren't also communicating about a bunch of other things.

It's also more likely that someone will blow up at SXSW this year because of Twitter's high-profile success last year.

What does it take be a hit?

A winning app has to be easy for lots of people to use and has to provide clear value to conference and party-goers. It might seem valuable only at SXSW but end up proving itself afterwords due the scale achieved in Austin. That was the case with Twitter, which I and I'm sure others planned to stop using after SXSW. Photo by super-photographer Scott Beale/Laughing Squid

Buzz momentum leading up to the event is also very important. If a good number of savvy web lovers have just become power users of an app before SXSW, it stands a great chance of reaching critical mass there.

Finally, it has to perform reasonably well for a high-traffic week. Other than a underwhelming hallway demonstration, Twitter held up better at SXSW last week than it has at almost any time since.

So here are my favorites for possible breakout apps in Austin. What are yours?

The Contenders

Live streaming video
Qik, Mogulus, Ustream, BlogTV or Yahoo! Live

Live streaming video has built up a lot of interest in recent months, with the entry of big players and the announcement that Live YouTube is coming soon raising that interest to an all time high in recent weeks.

Live video is great for events because it leaves users feeling empowered and provides immediate feedback when you see how many people are watching your live feed.

Why this won't be it.

Live video is not easy for large numbers of people to use. Despite being easy to do, it's hard to do well and frequently. Most people aren't very good at it and anything but the right hardware equals fail in a public event setting.

AIR Twitter
Twhirl, Snitter

Third party Twitter clients built on Adobe's AIR are beautiful and compelling. They aren't believed until their seen. People in Austin will look over each others' shoulders and say "what is that?"

Twitter clients will probably grow in user numbers a lot before and after the conference sessions in Austin. I love Twitter and will be celebrating our first anniversary together in Austin.

Why this won't be it.

Don't count on anything Twitter working. Despite recent hires that were supposed to solve the scaling problems, Twitter will probably suffer extensive downtime during a week-long giant event. It is much, much bigger than it was last year, but you'll probably hear as much complaining about Twitter at SXSW as you will praise.

If Twitter can hold up that would be great, but desktop apps already have one strike against them at an event so dependent on mobile communication.

Alternatives to Twitter
Pownce

A more sophisticated but less used alternative to Twitter, Pownce could come in to fill the gap. It's already got a small but vocal fan club of web elite.

You may hear a lot of people saying in Austin, "that's it, I'm moving to Pownce."

Why this won't be it.

Twitter loyalty runs deep, even during the down times. Many people are unable to break the habit no matter how angry they (we) become. Pownce is a little more complicated and hasn't been experiencing a significant upturn leading up to SXSW.

Better conference resources
Sched.org

Sched is a just-released event schedule interface build by Taylor McKnight. The schedule part of the SXSW website is not good and Sched.org makes it a lot more usable. It's easy to dynamically plan out your day on Sched, selecting both official and unofficial events listed there. Then you can shoot the URL of your personal calendar off to a friend.

Sched creator Taylor McKnight is the man behind the geek-loved PodBop and the designer of version 2.0 of the Hype Machine. He and Sched co-creator Chirag Mehta also built Chime.tv, a feature rich video aggregator worth checking out.

These guys do smart little things, like letting you view group schedules by adding multiple usernames joined by commas in a Sched URL and offering a forehead slapping "why didn't I think of that" account creation and login proccess. A lot of people are already talking about Sched on Twitter and I expect it will get good traction in Austin. Here's my schedule, if you're interested. I haven't filled anything out yet.

Continued below screenshot

Why this won't be it.

Sched.org is more "wow" than it is seriously useful. People come and go from events at SXSW, schedules don't hold steady hour by hour. The site is also pretty slow and doesn't have the same social appeal or feature set as Upcoming does. Finally, nobody cares enough about what you're doing at SXSW to want a full copy of your scheduled panels and parties to attend. There are so many fun people there that it's better to just see who you get to see by chance. Except for you, Taylor McKnight, because you owe me a beer.

Activity feed aggregation/ Lifestreaming
FriendFeed

FriendFeed is a super simple way to view all your friends' activities on Twitter, del.icio.us, Mag.nolia, YouTube, Flickr and lots of other sites - all in one place. It's going to be great for SXSW. Flickr is a big part of tech events but FriendFeed is going to make it even bigger, with all of a photographer's friends seeing their photos - not just those that go to Flickr itself.

Friend discovery gets nailed in FriendFeed - plug in some accounts of yours around the web and it will recommend friends with similar interests all day long. That means rapid scale up in network effect and big ease of use. The "people who find you interesting" feature is really flattering and it's always good to appeal to the ego. Here's my ego on FriendFeed.

I've placed a link to FriendFeed in my browser toolbar and am already clicking on it throughout the day to see what my friends are bookmarking, what photos they're posting and to see a finite number of peoples' tweets. You can leave inline comments on any item's link in Friend feed or say you like a link of someone's with one click. It's already getting a lot of traction and I think it's going to blow up big in Austin.

More likely than Pownce, you're going to hear people saying that Twitter down-time is less of a bummer because the rest of FriendFeed is still available.

The service launched publicly this week, was founded by ex-Googlers and just announced $5 million in VC funding.

Smart, connected attendees of SXSW (and who doesn't want to be one of those?) are probably going to be dropping in at FriendFeed all week while half paying attention to panels. It's like Twitter but better in some ways; it's more expansive, more interactive and so far more stable.

Caveats and Pitfalls

FriendFeed might not scale well. There's not a mobile component. It's not the prettiest thing in the world to look at. There's no API so there's no ecosystem around it to make it more awesome - something that's been very important to Twitter's ongoing success.

Conclusion

The killer app in Austin might just be beer, it's hard to say. The time and conditions are right, though for somebody's service to prove itself on a big, important and informal stage though. Good luck to all the innovators looking for a good time at the conference.