I vote for same division. Seriously. Just go geographic, and have:
NE, MN, IA, WI, IL, NW in the west
OSU, UM, MSU, PSU, Pur, IN in the east.
Have one set non-division game every year if necessary to preserve rivalries that may be broken.
NE needs a rival, and IA seems like a likely choice.
I wasn't crazy about the idea of a championship game when the SEC started theirs, but it's kind of grown on me. And I don't think any rivalries have broken down because of it.