Writing Contests & Scams

I’ve been thinking a lot about writing contests lately.  I haven’t submitted anything to one of these in a while, but it is something that I might eventually do again.  While I was searching for contests, I found this page:

http://www.canauthors.org/links/markets.html

I found this site to be quite interesting, because it offers some helpful suggestions about which contests are legit, how to figure out a good contest from a bad one and also provides a lot of support for new writers.

As many questions as it answered, it got me thinking: is it better to submit lots of stories/poems/whatnot to contests or keep your writing within a smaller writers’ group?  Which medium do you think allows writers to develop better?