I don't have a whole lot of public room experience, if you guys have any advice, thoughts or suggestions about what works feel free to share. Shorter races or longer races? Stay at one track or move around? Let the room vote on tracks? Penalties?
Most of my time in GT5 has been in public lobbies, so here's my advice.
If you want to make the room the best it can be, always include the word "CLEAN" in the room title (for instance my room is usually called "FIA_Clean-Pro, Stock"). There are clean rooms & dirty rooms, so no one will be confused if it's clearly marked. I only ever go in public rooms that say clean or fair in the title, if there's no description then I won't even bother entering.
As for penalties, having them off & damage on light will attract the cleaner drivers & sim-racer types. Just make sure to tell them where the track boundaries are in your opinion. A room called "GTP_OLR-Clean" would take care of that for most people. Also, when new guys enter type something along the lines of; "ATTENTION NEW DRIVERS! Penalties are off, so drive extra clean or you'll be kicked!"
Races between 10-15 minutes are usually best, you're spot on with that, with reverse grids also. Any shorter & you won't get a proper race, any longer & people entering the room will generally lose patience & leave. Sometimes a short qually sessions of 6-8 minutes is fun, if you remember to set the grid order back to Fastest First that is!
Some rooms will stay on 1 track for 2 races, alternating between a spec race & a shuffle race is fun. Most rooms will change track every race though. If you let people vote, you might end up racing on tracks that you don't like, or that aren't suitable for the car/pp track combo. So, choosing them yourself is best imo. Shuffle rooms tend to fill up a lot quicker that other rooms, so I sometimes start with a few shuffle races & then change to spec races.
I agree with kicking bad drivers quickly, especially if someone you know & trust has reported them to you. An alternative would be to ask members in the room to call a kick out vote, so they can decide who stays & who go's. They just press the triangle button over their PSN ID & select it, everyone apart from the host can do this.