IanB - I think Midchuck's post, about eighth from the top, explains what we're seeing now days - the "circle jerk" with the same tune being played for twenty minutes.

In terms of what an old time fiddler's contest back in the old days in the South would be like, I'm not sure. Currently the contests in my neck of the woods (the northwest) consist of two to three rounds of three tunes each round - a waltz, a hoedown, and a tune of choice (hornpipe, rag, jig, etc.) - and there is a time limit for each tune of around three to four minutes. Scores are posted after each round, with cut off limits marked, eliminating about half the contestants each round, until in the final round usually only the top ten scorers are left competing. This way you can get through 50 or 80 fiddlers in two to three days of contesting.

As far as the "key of the day" thing, usually the fiddlers could shift keys easily, unless they're in some cross-tuning like AEAE, etc. It seems to be that they don't want to alienate the old-time banjo players who typically (around here) tune in open-tunings of either G or C, which allows them to capo into A or D - two of the more common keys for old time music.