As we creep up to the second anniversary of the Joomla Site Showcase in April, I'd like to share some of the experiences myself and the team has had. The current team consists of:

Lee Cher Yeong (Malaysia, the developer of Mosets Tree)
Amanda Warren-Gonzales (US)
Pablo Yamamoto (Argentina)
Mike Hamanaka (US)
Sébastien Lapoux (France)
Tarik Assagai (US)
Past members have included Matt Lipscomb, Carson Pierce, and Jonathan Lackey. Everyone has done a fantastic job of managing the showcase and making it what it is today.
The Site Showcase was created to do exactly that—to showcase how great Joomla is. I found that when I was talking to clients about using Joomla, they wanted to see examples of websites in their vertical that were successful using Joomla. In some sectors, especially the enterprise, companies are still getting used to the idea of using an open source CMS for their needs. This enabled me to show them specific examples and I felt sure that many others were in the same boat. Hence the Site Showcase was born in April 2009.
Sometimes people ask, why does it take so long to publish a site? Well, go through a similar process as the Joomla Extensions Directory. We check each entry against our guidelines, which includes making sure the site isn't offensive or violating the trademark. It's really obvious when somebody just wants some SEO traffic for their site when they submit it. These sites are half-finished, broken, minor changes to the default template, tricky redirects, tons of Google AdSense, etc. These sites obviously don't showcase the best Joomla has to offer so they are always rejected. With over 2200 sites so far, around 100 sites each month are processed by the team (into 112 categories).
On that note, it's amazing how few actually read the Site Showcase guidelines. Every day a web design/development shop submits their website, even though it explicitly states that the Joomla Resource Directory is the place for those. 
Some people have misunderstood the concept of Site of the Month as a contest or a number of other things. The Site of the Month is simply a site that the Showcase Team really likes and we feel it should highlighted for that particular month. If you're on the team and you build websites, you're automatically disqualified from being featured. The process consists of the team coming together around the end of the month and sharing their top URLs. We decide what's the best showcase for Joomla itself (it helps if it's a high-profile project) and that's the Site of the Month for that month. The team's schedules vary since we're all over so we try to published it on the first of every month (or thereabouts).
We also monitor the showcase for comments and clone voting. This happens fairly regularly when a site owner want's to bump up their ratings so they create multiple accounts to cast 5-star ratings on their listing. We have pretty sophisticated tools to detect this (like the JED) so we have to remove those and make sure nobody is trying to "game the system." 
Occasionally, a site was Joomla when it was submitted and approved, but over time it has changed to WordPress, Drupal or other platform. We try to keep an eye on those changes as well.
Unfortunately, we get very few case studies from people who submit their websites. We'd really like to get more of these because they helps users learn about how the site was put together, what extensions were used, and other helpful tidbits.
What's the plan for the future? We hope to raise the bar on the websites included. We know there are a lot of great sites out there that aren't in the showcase and we want to include those. We hope to get faster with site processing. We hope to someday overtake the JED in number of listings. We hope to continue giving users and potential users more and more great reasons to use Joomla...and much more!