I've never done one, but I've listened to other people entries over at mixoff.org a bunch of times. It's pretty cool to see how a bunch of people have a totally different take on the same set of tracks. And for those who aren't so good, they can learn a lot by asking questions to those who are better, and they have the same set of tracks for a perfect reference of the answers they might get. I don't think it's so much about the competition, at least for lower level people, than a great tool for learning.
mixoff.org has competitions from time to time, but the most valuable thing is that people post what they have tracked sometimes and allow you to mix them to learn. Also, for the same sort of thing, check out Mike Senior's website! It's a gold mine! The 'Mixing Secrets' Free Multitrack Download Library (Cambridge Music Technology)