Instant bucks vs. artists rights. A conundrum in deed!
The Graphic Artists Guild is opposed to any artist selling to stock art companies because of the very reason you stated. All your rights a signed away for C-note.

I once designed a logo for a University for use in a calendar. A year later I arrived to find T-shirts, rugs, mugs and anything else you can imagine being sold for a profit at the Bookstore. They used the logo for 20 years. If you arts a hit, the stock art company is the one making the bucks.

On the other side of the coin, I have sold pieces because I needed the income and grinched about it afterward. It's all up to you my man. If it makes the house payment until your clientele grovels at your feet, I say so be it.
Good luck!

I would highly suggest putting a little time and effort into doing some research on Licensing. Like the other reply- just putting it out there in stock art world means that some Random Joe can make some bucks on it while you get squat. On antoher note however, these "design contests" are very scam-like: a lot of times (like a recent one for DefJam records, or was it Death Row...) they retain ALL the rights to everything submitted. Which means they get tons of free work. So make sure you read the Terms and Conditions of everything before you submit anything. Even deviantart.com has a totally shitty T&C where they retain the right to publish or use anything you post without telling you or giving you a dime. People have suggested I post my stuff there but i ran when i read that.

I read over the Threadless legal mumboo jumbo and it seemed pretty ok. Retaining the rights, allowing limited = good. Exclusivity = bad unless you are paid top dollar and/or have a limited time contract- ie, your design is not tied up for the life of it cause then it's stuck and you'll never be able to use it again. Letting them use it only if you get paid = good. Them retaining right to use it even if it is not the "winner" = bad.

Some thigns to consider anyhow...

On one other note: putting together some promo materials for yourself and pimping yourself to product licensing places, or just sending it yourself to copanies you would see your stuff on is a great idea. Takes an investment of time and $$ but it is worth it. Do some research first: good to look pro right out of the gate.

I hear these problems all the time from other illustrators. Here are some tips to avoid these problems...

Artist controlled stock art - Stock art companies usually make the lion's share of the profits with artists making pennies on the dollar. Not worth it for any artist. Avoid them at all costs. 'Rent' limited usage of your work through websites like theispot.com or folioplanet.com which have artist controlled stock art options. While yes there is a fee to join them, it is an investment in your business to insure that you receive proper fees for usage of your previously created work. You could also set up an area on your own site to offer licensing of your own stock work.

Always use a contract - Runaway usage of commissioned or stock art can be completely avoided by simply using your own contract and negotiating specific usage and fees. Limit usage per item, time frame and territory, retain copyright and set fees according to what are proper industry standard fees. Aim high, settle for middle, never let them see your bottom line. Negotiate the numbers from what you would love to get and negotiate down to what is a fair rate for the usage. Remember, the more they want, the more it costs (as in any business). The Graphic Artists Guilds Pricing and Ethical Guidelines is one of several great books to have in your art business library (for contracts, pricing, etc.). I highly advise purchasing it and using it as a guide.

Retain your copyright - Companies almost never need full rights to artwork. Other than logos, companies ask for it so they can run wild with the usage or resell it. And most times artists never ask for the fees they should be getting for the sale of intellectual property. Retain your copyright, limit usage, time frame and territory. If you do choose to sell it, be sure to double or even triple the fee. This will discourage them, and they may go for the lesser fee for limited usage.

Avoid art 'contests' that offer a big reward - These are simply calls for 'spec work' which you will almost always lose and they often take art submitted and use it for another artist to create. Almost always a total waste of time and effort. Your time could be better used marketing or developing your own art to sell for licensing.

Regarding the pinup work...I too do pinup art. You'd be surprised at the number of uses for this work. I have done identity campaigns for a liquor company, a cosmetic company and an online glassware company creating pin-ups for them (only one was a full sale of rights which I was well compensated for). I also sell artwork to a tee shirt company (newly commissioned art to their specs). Additionally, I have stock artwork I offer as licensed artwork (for stationery, clothing, etc.) and I plan to open up a Cafe Press shop featuring this work as well. Getting potential clients interested, well that's pure marketing which has to be done both consistently and targeted.

If you really want to do this, you have to take the initiative to go for it. It might be scary, and it may take a while to take off, but in the end, it will give you much personal satisfaction. Remember to stick to your guns, and always ask for the terms mentioned above. If they hedge or grouse about it, they are not worthy of working with you...they are not being professional. They are being cheap and trying to taking advantage. Always remember, no one can take advantage of you unless you allow it to happen. Ultimately, we are businesses working with other businesses plain and simple. We are not 'lucky' to be working for someone...we work for ourselves. As for 'exposure', too much of it can be deadly ;)

You might want to look in to freelancing your work for companies. You can work the licensing terms into your contract and still retain ownership, as well as developing your portfolio. Customers get proofs and print /web ready art, but you keep the vector files, so you would still have control over the art itself.

That's still a full business requiring marketing, selling yourself for jobs, but ultimately more rewarding because you would make more money and have an in-person business relationship with clients.

I too have looked into places like Cafe Press but I am not too sure of them. They have high priced products, and you don't earn much off of that. If you were committed to your own business you could probably print and sell items such as T shirts for much less, sell them on the web via your own site, an eBay site, or at street and art fairs in person.
Good luck...

Don't do it!!! Resist... I know the quick cash looks tempting but... just say no. The more stock images go out, the harder it is for illustrators to get the gigs. Why pay an illustrator the worthy price when we could just scry for little to no fee. It's like art theft.