Honestly, just HAVING the competition has done wonders for my exposure. I got lots of views on my Flickr site from the Weekly Assignments, whether I win them or not. I got tons of hits from the "Best of 2009" Assignment, both before and after the results came out (I was an honorable mention).
As far as prizes or recognition, it depends. I'm not interested in a new camera bag, external hard-drive, or other small item...I have it. In fact, for the prize of the "Best of 2009", had I won, I would have asked that you'd given it to the runner up, or I would have given it to a friend. Now if you were giving away a 5DMarkII, you've got my attention
However, with bigger prizes, you get bigger and better competition. So it depends on what DPS wants. If you want pros and experienced photographers getting into the competition, then you'd offer big prizes. If you'd like to keep the competition to us amateurs, then recognition would be the way to go.
If you kept with the ~$100 prizes, it'd be nice to see a selection. I don't need another camera bag, but a SmugMug account would be awesome. Or a Vivtar 285HV for aspiring strobists. Light stands, umbrellas, Black Rapids RS-4s ...it'd be nice if the winner could choose their prize based on his/her style of photography.