On the competitive/competition issue. One thing we do in our week long level I course is discuss in great detail the evolution of Martial arts, the intent of the arts, competition, and the paradigm/intent of training.
We (Modern Army Combatives) use a competitive model as the basis for our training. really for two reasons. 1. It gives us some common rules, and keeps people from getting hurt unecessarily. 2. Army guys like to compete and it gives them something to measure.
Day 1 we give a brief history of the MA. Here is a link of what we show: http://www.youtube.com/watch?v=B-lxbU47pho
I will keep it open for a few days...as there are some copyright issues I don't want to deal with.
We then show the UFC fights over the next several days showing the dynamics of competitive fighitng and the evolution as rules where imposed.
We discuss with the students the how rules influence things and that they must be keen about this as they study and compete. There are things you do in competition that are not good on the street or in real life.
Competition should not be a BAD word, done properly it is a good thing. While at least in my aikido experiences it is not really there in a instructor sponsored way....don't tell me you don't "compete" on some level with your favorite uke's when you are doing technique! We all do it in someway! I believe it is human nature!