"I don't come on here for a very long time...and then I do and see this question." LOL! And ditto much of what Allison said (we talk about this a lot). While I've had my share of success with various compettions, I'm clear that 1) there are many, many far superior photographers out there that don't even enter and 2) it's totally a subjective crapshoot. I enter mostly to guage myself against my peers (that do choose to enter), but I can't deny there's a decent chunk of ego boost that goes along with any publication or recognition :-)
I always weigh the cost and PITA factor vs. the prizes and prestige of the particular contest. The cost (both $$ and time) to enter is definitely a big factor. While prizes like an Indonesian liveaboard on a class boat is great and worth a nice wad of cash, that's usually the one top prize. Even if you are the one, top winner, you still got to shell out for the air and be able to arrange the time to take advantage of it. I like the contests that let me "rank" my preferences in prizes - I'd much rather have a dive light that I'll actually use than time at some resort that I wouldn't ordinarily choose, I have to rework my schedule around their window and availability, AND that's going to cost me $1000's just to get there.
The rules are just the rules. They vary from contest to contest and year to year, so it pays to read them and play by them.
I also pay attention to the rights I'm giving away. While I don't sell many images, I know there are others who do rely on their images for a big chunk of income and they deserve our support. I'm not going to give some contest promoter "irrevocable, global rights in any and all media existing now or any time in the future" - some try and grab this just for entering (I'm talking to you Conde Nast! ), so it pays to read the fine print.