A lot of people have been making this claim in this thread, but I'm a little bit skeptical. For one thing, I'm skeptical of the idea that competition always improves products in a commercial setting (though it surely does under some circumstances). But more importantly, I think there is a significant disanalogy between Free software projects and businesses that sell products. Businesses compete for customer dollars. What are Free software projects competing for? Users? Credibility? I'm not sure. But it certainly doesn't seem like they have the same incentives in place. People write code for FS projects because they're interested in it, because they need the functionality, etc. -- it's something they would do even if their efforts don't attract a lot of "customers."

What FS projects do compete for is the time and interest of talented programmers. For that reason, having competing projects can be more harmful to them than good, because it divides the pool of programmers: more programmer time is spent achieving common goals (like having an excellent C compiler) than would be spent if the different groups pooled their efforts.

(This is not, of course, an argument that competing FS projects are always a bad thing. Obviously, competing projects, forks, etc. arise for a variety of reasons, both social and technical. But I am arguing that just competition is not necessarily a good thing, either, especially when competing projects have common goals.)

Competing for the time and interest of talented programmers means being well-written, useful and interesting. Clang is more of a library than just a compiler, so it doesn't have the exact same goals as GCC. I think this is a situation where competition is a good thing- Clang will provide new, useful tools and GCC can try to improve on them or try to offer some other kind of advantage.