You REALLY have to check con-by-con for that kind of thing. Sometimes a "hall contest" is polaroids (wait they don't have Polaroid anymore...hastily-printed digital photos, then) of costumes that people can vote on, to pick their favorites. Sometimes a "hall contest" is a roving judge handing out ribbons to people who look amazing, regardless of the craftsmanship or if it's even purchased/commissioned. Sometimes a "hall contest" is duplicating exactly what the masquerade will be doing later, just without the element of going on stage. Sometimes a "hall contest" stands in for a crappy excuse for a masquerade, and is the only way to get your craftsmanship judged. I have seen ALL OF THE ABOVE.
I really only compete at masquerades where workmanship and performance are equally weighted and performance is not expected to be a full-on skit, places like CostumeCon, Archon, CONvergence, and a few others. This is the model I was introduced to as a newbie costumer back in the dark ages before the internet, it's the model that has been around the longest, and is IMO the most fair model to people who do care about their craftsmanship and their stage presence equally. I generally know what to expect from this kind of masquerade, and at those cons, there either isn't a hall contest or it's extremely informal and fun compared to the stress of the masquerade.
That said, do simply look into it at each con you plan to visit. I am in complete agreement with alpha_helix, knowing what you want out of a contest will help you decide whether you want to enter any given masquerade OR hall contest - or both!
Founder and Vice-President, Madison Area Costuming Society, a chapter of the International Costumer's Guild
Strange Land Costuming - www.strangelandcostumes.com