So after typing up my class handouts and deciding on percentages for participation I went reading through the blog-o-sphere/listserve universe and stumbled across several interesting ideas. One of the threads discussed one teacher's issue with a student who does no homework and yet scores 95% on her tests. In my opinion if he can score a 95 on the test without doing homework then the homework seems to be pretty useless and the student obviously needs greater challenges.
Anyway, some other teacher replied back and the topic went to the fact that grades should reflect what the student is actually learning. I realized that my participation grade is kind of the same deal. If a kid doesn't participate but can score well on tests then aren't I doing the same thing? Well sure you know the material but you didn't jump through my hoops so I will add some punitive damage to your grade so I feel better. I think the better choice is just to require participation through class management rather than by some subjective grade being imposed.
Looks like a rewrite is in my future.