If it's done well, it can be good branding. People might not click banners, but they'll remember who gave out an Xbox and dragged the whole process out for a freakin' week...lol.
For a webmaster program, even if they get just a few webmasters who send them a few sign-ups a month, they've already made more than their money back. Same with a content provider. If they give away one set but get their name out there and sell just a few one-off sets, they've more than recouped. Not to mention the big fish they might hook who will drop a few grand on a big order or a content package.
I mean, the contests have gotten pretty lame lately if you ask me. But, I see the reason behind them. I'm just waiting for someone to give away something I want. I hate video games...buy me a purse or a new pair of shoes.
