It's interesting, I've never considered it a competition, simply a fun learning experience and a personal challenge.
The whole process of the challenge helps you develop a range of skills, and seeing what others do is both incentive and inspiration.
It challenges you to:
design something to fit a specific subject
work to a deadline
push your skill level
learn about different plug ins
deconstruct your modelling practices to understand how to work more efficiently
look at a design as both a whole and the individual parts
and other things I can't think of right now
I honestly can't see why anyone would cheat, I'd feel very sorry for anyone who does.
Does anyone really care that much about winning, I just love the whole concept and seeing what others can do, I've learnt so much from it.
I use SU as a design tool for my sculptural work, and I don't make finished images and renders etc only working drawings, so these challenges are probably the only time I would display anything of my SU work, it's a bit of fun, a break from the norm and a good learning experience.
I still remember my first entry, it was in the chair challenge, and I was so excited because I had just learnt to smooth edges with the eraser and ctrl, that one took me the whole 30 min at the time, now it would take 30 seconds.
And as said above, planning what you are going to do is so important, as with anything, plus understanding and using keyboard shortcuts and the right tools for the job can make all the difference.
Oh well, it's late and I'm just rambling now.