This behavior is completely common. I have seen this in every trading contest ever offered. The problem with virtual trading contests is that it rewards users who take large risks at the very beginning. If you reason about the logic of this, it makes sense. The best way to propel oneself to the top (and stay there) is to make very large trades with lots of risk at the start.Lastly, I want to offer some useful info from the way last year's contest played out for me. The winner last year, Patrick Christmas, only made a handful of trades. He more than doubled his money early (2nd or 3rd week) and then basically stopped trading (or traded so few shares as to not make much of a difference in his account) probably waiting to see if anybody would catch up, which nobody ever did. This year they require at least 25 trades, which is a good rule. Also, the contest is 8 weeks instead of 10 - which in my opinion is a bad rule because I think that the longer duration of the contest, the less luck will be involved in deciding the winner.
This works very well if the contest allows multiple accounts, because you can trade in one direction in one account, and the opposite direction in another account. All you need is to choose a highly volatile instrument, like Forex or a fast moving stock (GOOG). One position is sure to win, no matter what happens. From there, you can apply the same technique again (across a total of 4 accounts), or switch to a different more conservative strategy. Many contests do allow multiple accounts, so you can see how easy it is to astroturf these things.
In the end, these contests are nothing but a red herring to me. Usually nothing can be learned by watching (or participating in) them. Because the competition uses the techniques shown above, so it really boils down to observing yourself make trades. This can be done through any regular broker, as nearly all of them will allow anyone to open a virtual trading account to practice with.