I frankly, usually, find these events fairly annoying, as they cause a large number of people to build something that is out of touch with practical concerns like marketability or even end-to-end feasibility: it is easy to come up with crazy ideas and build prototypes; what is more difficult is to come up with a plan for how to actually build a business.
Meanwhile, as everyone is broken down into little teams, very few people actually meet others; the worst case scenario of this is a lot of times people come with a few of their friends, and literally meet no one.
I thereby find myself going to events like this and purposely not joining a team and not entering the a-thon, and instead watching like a hawk waiting for the few moments when someone is taking a break (I then meet them).
On the other side, I've seen events like this work well: in specific, the 360|iDev game hack-a-thon is nearly perfect. As it is part of a larger conference, there are lots of chances to meet people, and in fact many people don't participate at all (as there is no real expectation to); of those who remain, they are clearly building "something fun", so the idea of "would this actually work" is irrelevant.