My league on Monday nights has an innovative solution to the problem of equality in league play.
First, we have a 30 week season that is split into two 15-week halves. For the first half, last season's second half average is used for returning bowlers. Sponsors who bowl in the league are put on their team, and everyone else is divvied out (including team captains) so that the total team average to start out is within 1-2 pins of each other for each team. This process is repeated for the second half, using the first half averages of bowlers to do the same process.
This allows all teams to start off on relatively equal footing and there is no handicap in the league (it is basically a scratch league) and includes bowlers of all levels in the league. Nearly every year each half is still up for grabs and down to the wire in the last week, even last game of the half. This is exactly what happened last half.
The teams are changed around each half, so people probably would need to get used to the idea of switching teams.
While this isn't a 100% solution for everybody it is a creative idea, and since the handicap system is not used at all and all skill levels of bowlers are still included and have an equal chance of winning, you are not discouraging lower-level bowlers from participating.
High Game - 300 9/17/08
High Series - 810 9/17/08
High Average - 232 (current as of 2/12/09)