Having contests or competitions gives your site fame and - well, it initially takes away fortune as you ship the prizes to people, but fortune somewhere in the distant future (it'll arrive, eventually, don't worry).
The main aspects of any contest are, of course, what people have to do and then what they could win. The trick is making them send you things that'll improve your site, while the prize entices visitors to do so. Don't, for example, offer a copy of Zero Hour to someone for a Zero Hour map competition. That'd be silly. Send them $10 - or the equivalent value in jelly babies - instead. Damn those things are nice.
Here's a competition I was going to launch a few months ago, but unfortunately I used the rare and valuable prize to clean myself up after a particularly....uh, never you mind.
GRAND CONTEST! PRIZES!
Oh yes! You read that correctly - we're having a contest and you could win prizes! (If you are now confused, read the title again. We understand.) The details, you ask? Woah, hold on there speedy; I have to tell you what you've got to do and what you might win first.
You design and code us a brand new layout and backend, preferably PHP & mySQl based with Flash used where best.
That hard work will be paid off with...a LIMITED EDITION WESTWOOD NAPKIN, stolen straight from an anonymous Westwood employee's dinner table when he was choking on a piece of fillet steak a few years ago. This rarity should be framed and adorn you bedroom wall so you can remember Westwood (and the choking employee if you're so inclined) whenever you happen to glance up at your wall!*
* frame, required nails and manual labour costs not included.
Before I get flooded with requests to re-initiate this contest, I have to lay down the law now: it won't happen. It took months of planning for my agent to get that chef job at the guy's place, and he only just escaped. However, you get the idea when it comes to making your own contests, so my work here is done.