they monitor the github repositories. relatively easy to find people who blatantly cheat by doing implementation beforehand

there's no restriction on paper planning so i'm guessing the top sites probably spent weeks on design and specing. whether or not they created photoshop comps probably doesnt matter

Yeah, they monitor your repo during the competition. You're only allowed to create paper assets before the competition begins. You can see our paper mock (for smacksale.com) by clicking the robot in the footer or here http://smacksale.com/images/sketch.jpg