There are a few threads on SO that discuss coding contents & competitions. Unfortunately, many of them are either contrived problems, or based entirely on theory, math, and/or algorithms. Where can I find some contests that focus on the application development process, wherein the competetitors deliver an entire, functional & usable product as their submission?
Good question! Get a job as software engineer! ;-)
Truly, if you want a contest in creating realistic challenges then you're almost trying to do the same work as trained professionals who earn their daily pay this way. You could start working freelance, creating applications and see if companies are willing to pay for it. You'd be competing by checking the amount of cash you're earning this way.
It gets even better if you try to come up with a new idea and walk through the whole process from starting the design to do the final testing. But before you try to do this, this happens to be a lot of work for a single person. You would need to create a team of like-minded individuals with enough experience to help you. And before you know it, you'd be posting an interesting open-source project at Sourceforge and check it daily to see how popular it's becoming.
Either becoming a professional or designing open-source from the ground up would be interesting competitions. It always tend to end one way or another...
TopCoder is widely known for its algorithms contests, but it also has contests in architecture, design, development, assembly, and testing.