Coins don't necessarily need to make massive innovation.  You can also create value through good branding and community.  Coins such as Mazacoin, Auroracoin and Dogecoin; for example, mostly gain momentum because they are a movement.  Also coins which are essentially some kind of store credit like Zedcoin will see limited success.

That's why I'm not too fond of the idea of "battle coins".  It will probably gain traction though.  see here:  http://bitcoinprbuzz.com/the-sha-256-interest-bearing-bitcoin-alternative-battlecoin-bcx-now-trading-on-cryptsy-com/