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contest are good, and personally, i have benefitted LARGELY from winning just a few in a short period of time (won like 2 in one week some time ago)...
but the contests are only as legit as the people running them and the people observing GFY..
and in either case, i don't think any of us should complain about anything surrounding contests here, if you design something for free and broadcast it to all of GFY and surfers, you have to sacrifice the seal of trust we have with clients and just deal with what "could" happen from throwing ourselves out there.
All in all i think contests are beneficial to many and usually the person holding the contest, but don't think all involved have the genuine intention that we ( the designers) have.
My 2, back to work :-)
FF!
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