Also this reminds me of the prop bet from "Four Rooms" where the one guy bet his sports car that the other guy couldn't light his zippo suceessfully 10 times in a row. If he failed, he would get his pinky finger cut off. I think that bet would be less retarded that this one by a long shot.
If you never saw the movie by the way, and want to know how it turned out:
http://youtube.com/watch?v=BzYOrldilP4