Yep, they pay. I've had paypal cash show up for both Feb and March for my listings.

Google Blogoscoped readers are lucky that I wasn't the first one to describe the contest here. I would have denounced it. A question comes to my mind every time I see someone writing about this contest: Don't they notice?
Probably everyone takes part so they "support carcasher" to abide the rules.

I want to be more clear about this particular contest: This is manipulation to bring an irrelevant commercial site to the top in Google. If you want to thousnads of SEOs do link building for you but you want to pay only a handful, stage a SEO contest. Online Casions do the same.

I wonder when Google will realize that staging a SEO contest to make a commercial site rank higher is altering the natural link ranking and curb such activities.

It's a shame I am too busy to spred the word but I am still in the top 30 without even taking part.
Check it out: http://fcuk-the-carcasherdotcom-seocontest.onreact.com

SEOs just make search engines worse in my opinion.

SEO can also do a lot of good as it can be an argument pro-accessibility. Try to convince your boss that "blind web readers want the info too so we should invest time to create alt-text". I tried that, actually, and the response was "we don't do websites for blind users." Now tell your boss "we shouldn't use Flash only content and navigation as Google can't get the info this way... it's searche engine optimization to do this." This has become a much more powerful argument for W3C accessibility in my experience. Not that it's justified (why should we exclude blind readers?) but because some people hear the sweet sound of money when they think SEO. And that, ironically, is also what's bad about it... some get greedy. They don't ask "do we actually *belong* in the top spot for this keyword?", they think about increased revenues, and conclude "we *must* be in the top spot for this keyword", and then they're willing to pay any shady company to do that work. I guess it's just that 80% of everything is bad, and who knows, that might be true for web designers, movie makers, dentists, and even SEOs...

At the end of the contest, the winning page must have a high PR.. I wonder if Google knocks it down? I wonder if the increasing prize value is suggesting that the contests are increasingly adding value somewhere, to someone.

Justin, not someone, the contest is adding value to carcasher. Cacasher is the winning page. You have to link to the sponsoring site if you take part or at least display an unlinked text ad.

SEO itsself is not the problem, employing fast track techniques that do not reflect real relevancy for the users is the problem.