But remember, people on Kickstarter are pledging money, not investing money. So if you don't offer good rewards, you won't get any money, and your project will never happen.

Unless of course the project itself is the real reward.

I think the tiered award thing hurts a lot of projects by distracting from the basic fact that what you're really contributing to is making the project real.

I'd wager that people pledge because they want your product, not because they get t-shirts and mugs.