The methodology you describe and credit to James Webb Young aligns nicely with an amazing talk by John Cleese on Creativity. You can find the video at http://vimeo.com/18913413. He bases his talk on a Berkeley psychologist named Donald McKinnon who also did his research in the 60s. In addition to providing a great refresher for light bulb jokes he provides concrete steps to get in the creative or "open" mode. He lays out five elements needed to create the right circumstances for coming up with original and creative ideas: 1) Space - Clear your calendar of interruptions 2) Time - Set aside a specific amount of time 3) Time - classic Cleese here with time listed twice. This matches your step 3 as well where you give the subconscious time to work. 4) Confidence - Worry about making a mistake will kill creativity. 5) Humor - playfulness and curiosity are keys to unlocking ones natural creativity. The more serious the matter the more it needs a dose of humor.

I must say that teams that have fun have tended to be more creative, collaborative, innovative and productive than the ones that are serious, be they in software, school, or war zones.