Gill, the simple way around that is for the peeps in question to ask permission from the photog. It's that easy. I've just given permission for my local branch of CP to use one of my shots in a newsletter. Thing is, it is a legal obligation to do so - copyright laws and stuff. Basically, you need to cover your arse so that you don't get shot at.
I still think the easiest thing to do (and it is a common requirement in photo comps / photo cat shows because of copyrighting laws) is stipulate that all the entries must have been taken by the person submitting the photos. If you get into trouble, it can get expensive.
Classes - what do you have in mind, Gill? I'd certainly split by colour, and poss by coat length depending on number of entries, then have some additional fun classes as well e.g. cutest kitten, most amusing, caught in the act etc.