Showing top posters on the front page, thus creating a competition probably increases user contribution to that site. But do I, as a reader, care about who the top posters are? Does it deserve to be on the front page, or even belong there?

On one side it degrades the quality of your site, while it increases user contribution on the other one. So which side weighs heavier?

It really depends on your goals and preferences. When I was running a gaming forum, showing quick reply forms or displaying post counts were positive motivators for increasing the number of posts made. However, the tradeoff made was regarding to the post quality. To increase their post counts, people made unnecessary posts and the quick reply form promoted making quick posts of poor quality. Since quality was more valuable than quantity, I always removed post counts.