I read about a short story contest the other day, and followed the links to find the Writer's Toybox.
I thought about it but decided not to enter the short story contest (featured on the main page, just click the link above). First of all, I never read short stories so I don't know that I'd be any good at writing them. Second, I'm a little wary about how copyright works; I'd probably set any story I wrote in the world I've created for my novel, and I don't want to get boxed in. (This is probably a way for the publishers Writer's Toybox has teamed with to get stories for an anthology without paying.)
I'm not saying I'd never enter a contest. But I haven't started submitting to publishers yet, so I don't know what kind of feedback (if any) I'll get. I'm not quite ready to try contests and nontraditional routes, though I may at some point.
Anyway, if you win the contest, you get a book contract, though it's from kind of a niche publisher. I don't know how many people will enter, as it doesn't appear that the site gets a lot of visitors, just from looking at it. The design is rather old-school and there aren't too many forum posts. It seems like someone trying to get something started, rather than an established site. (It also looks like they are aiming to have paid services in the future.)
I'll reserve final judgment until the site is a little more developed, I guess. Enter the contest if you want; all the information is there.