I've been following the contest, adding sites to a directory and no doubt list all of the "characters" who are commenting here.
What's undoubted is that it's a game, to prove a skill for sure, but a game nonetheless. We should all be grateful that we have the time and skills to participate. $4000 is alot of money, but as a return on the investment of the time it takes to win I reckon it's pretty poor, personally.
If you are actively soliciting and maintaining a links directory then Xenu can be really useful. A good site will move links over time as they work to keep the pages small and themed (and therefore valuable). That can make it hard for you to verify if your link is still on the site and still accessible from the index page. Xenu can make the job easier because it shows you what steps to take. If Xenu can't find it, neither will googlebot et al.
There are also scripts to convert a Xenu sitemap into a Google XML sitemap (I wrote one of the early ones) so that you can take advantage of that new initiative.
I'm a pretty active blogger and participate at sites like http://www.blogparty.com and in the DigitalPoint bloggers forum and am astounded that I never heard about blog day - until after the event!
I guess I'll just have to keep tabs on it until next year ;)