Patrick Rodio has some good advice on his blog Could You Describe the Ruckus? (guess what movie that line is from and win tickets to see Poison in concert in Spivey's Corner) about screenplay contests:

"I used to send my screenplays to just about any and every contest that came down the pike. What a waste of cash.

Are contests meaningless? Well, mostly. If you're going to enter some, pick the reputable ones, like Nicholl, BlueCat, Austin, Scriptapalooza. The Sundance Lab. They all at least have a track record and some in the industry do pay attention to who wins them (notably Nicholl).

But how many pay attention really? Here's the thing. I ALMOST won the Austin Film Festival's comedy competition in 2003 with my feature script, Cricket Hill. It came in 2nd place out of 3000 scripts. Not bad. And off of that, I didn't sell it. (had some meetings though, also my suck-ass manager at the time didn't help me situation). But the guy who won? Did he ever sell it? Not that I've heard.

One thing I do notice on some of these contests is the winners. Some of these winners have won multiple contests, I've seen quite a few winner's lists with the same names/scripts popping up on many of them. Awesome for them, I bet their script must rock.

But they haven't sold it yet. Contest cash is nice to get, but what's the point if no one is buying your shit?"

Indeed. Marketing yourself and your work is probally the way to go.