DIY Filmmaker Sujewa has written a thoughtful piece discussing the pros and cons of entering your indie film in various festivals:

"I think there are only two groups of people who are essential for the existence of film as an activity: the filmmakers and the audience. Outside of those two groups we have agents, press, studios, financiers, critics & all manner of often supportive but sometimes obstructionist groups who make money off of & derive their power from filmmakers & audiences."

Filmmakers should especially read this post.