Having witnessed, tested, and been on the receiving end of one, I honestly think the freeze-dried pea grenades are the best solution for frag in airsoft. They WORKED, they didn't need need to be recovered, they didn't hit harder than most stock TM AEG's (having one go off in the near-proximity of my head) and they were impressive to boot.
Tell me more about these freeze dried pea grenades. The only ones I know of are firecracker powered, which are illegal here, maybe there are other kinds? I'd like very much to use freeze dried peas to keep the cost down.
Traverse City's Only Airsoft Group was taken down by a spamming douche.
How was it built, and would it be allowed at standard rec. games?
That's entirely depended on the field. For example, I know No Limits won't allow it because the paintball field doesn't allow any pyrotechnics, even cold smoke grenades. However, I know cqbr has used easter egg grenades at SFOD games.