@'darthwhovian'

I'm not quite sure I understand your first question... could you rephrase and elaborate/expand it please?
Intuiting it as refering to "do people play the game recreationaly vs competitively?", many play SWMs for fun as against for competitive sake etc.
The promotional materials on the packaging and marketing for this type of "gashapon" stated 3 ways to play. I'm more of a collector/RPG player myself.
Hutts has even played on Mt Cooke in New Zealand, which to-date makes this the highest anyone in the world has played SWMinis (*until people elsewhere post in, from say, mount everest or space, which with Virgin Galactic almost ready, is a near-possibility!)
(I have seen unconfirmed photos from an AUS submarine of a SWMinis game, and surely someone's played SWMinis on a plane (say between somewhere in Asia/Oceania and Europe or USA, its a long flight!) so people might have played higher...)

These days, there are still convention circuits and unofficial playoffs at LGS... but you're a little late to the party I'm afraid: most of the big interest was back in between 2004-2010, while the game was supported officially.
Most, these days, play other game systems or FFG's X-Wing, if they can game at all.
I play exhibition matches every now and then, and play with friends/family when I've the chance. I certainly play for fun; its a fun game, which is sorta like an extension to Chess, so very fun and very playable. (as an aside, it also teaches about exponentials and combinatorics as well as maths, so its a very useful tool).

If the question was more to "Why isn't there a custom-making competition?"
I don't know; we've not had many 'make-offs' (sounds wrong, but its like a bake-off competition).
Competitive mini making isn't really something I'd be keen on, though in the past there were competitions (where the set of The Lost Twenty v1 was made) and people won a prize, like a figure and some booster packs. It was fun, and everyone made loads of awesome figures!
Thats when I decided I'd have a go at SWMs customs, specifically Captain Fordo.

As for the second and third questions... I can't speak for everyone.
I certainly do enjoy gaming miniatures of all sorts: from chess to model trains, warhammer, heroclix etc...
Many of the "Greats" over here from the customs forums over the years, particularly Ironlightsaber (wow, thats a while ago now...) enjoy/ed to make customs from all sorts of themes and systems.
If you look back through the threads, you'll see individual's galleries.
Lilywan, for example, makes excellent GIJoe customs (which are for sale over on her Etsy store): Lilywan also makes awesome women minifigs, something of a rare commodity (well posed decent female figures that aren't all T&A poses...).
If you look on the Clix forums, you'll see people make custom clix from SWMs and vice versa, so very much some 1/48th~1/52 scale "creative destruction' going on.

I've seen some custom Dr Who minis elsewhere around the webs, in 1/48 scale (~SWM scale),
most are from OOP suppliers and are pewter, though the newer plastic daleks are decent if not a downright rort for the amount of plastic you get.

I've made some greens for my own game system (which I had to sell)
I made some Ben 10 Figures (back when Ben 10 was ben 10, not 'Ben Pokemon: Gotta Catch Him All'),
I rebased a lot of Disneyland PV figures onto SWMs bases back in the day (darth Mickeymouse and Darth Stitch, Mini as princess leia etc)
I used to collect GW Empire from warhammer, Slann mages, Grey Knights, Black Templars and Chaos armies,
I've gamed 1/56 modern military figures (Iraq Desert Storm and civilian 'asymmetric warfare tactics'): you'd be surprised how many military types play minis for visualising 'scenarios' . I think they're still laying around someplace in a box near the zombies...

some TMNT figures, Samus Aran (that was an easy shapewaysglue and paint!), and some alien figures for a ~MIB game. I had to take down my DA after complaints (both online and realworld from an employer...) but maybe some ghostlinks of the images remain?
I move a lot for work these days to survive, as I fear many others do also... so that could perhaps be why tabletop gaming is slowing a little...
Plus, many have other things real world that repeatedly distract from our hobby!
Luckily 3D printing has emerged as a viable alternative; there are many types, and local suppliers recently opened up a "come in and print" user prints system which is neat! Soon I imagine shops will spring up similar to Officeworks, but for virtually any object you want!

To your final question;
"Does anyone make or convert models for Tree custom pieces?"...
This has me intrigued.
For years, I quested for the perfect custom Ergesh... (its like a miniature bonsai to go on a mini base, long story).
Long story short, one of the best mini tree makers in the world is Ken To: I have several "Ergesh" I bought from him; they're intricate wire bonsai, some of the finest miniatures in the world, replete with an awesome miniature pot. They're ultrarare, ultra collectible.
There are several wire bonsai makers in Japan if you are looking for that style of figure: using a Japanese syntax when writing english in Google translate will yield numerous results.
It really does depend on your concept of "tree mini" though, and what you envisage... feel free to share some pictures or links to pictures so we can get an idea to riff on a theme.

You can buy all sorts of tree terrain ready made from craft shops and hobby stores; mostly theyre scenery decorations or for model trains/diorama kits. As for making them, there are many places you could try to make yourself some tree minis...
You can check out some White Dwarf articles online from GW; they used to encourage custom terrain etc, and show how to make trees from papier mache and glue; they can look really nice if flocked well. You can even make custom Ents in some of their tutorials...

I've only seen a few custom trees here on the threads over time... most seem to be generic tabletop terrain, as against say an "Ent" (GW makes Ent figures).
For example, someone (the name escapes me at time of writing) made a FANTASTIC kashyyk village a while back in scale with the ATAT figure!
Anyway, hopefully that helps the ideas bouncing somewhat,
and be sure to post your pics of custom minis/projects on the thread!
Kobayashimaru

PS Theres some neat tips and hints over here at
http://www.bloomilk.com/Forums/default.aspx?g=posts&t=10106
Theres even Papercraft (pepakura) models you can try for relatively cheap to represent troopers, vehicles and terrain of all sorts!
You can use them as templates for cardboard or plastic, but I recommend scotchguard! (papermodels are water-magnets!You dont want to see your hours of folding a Vulturedroid unfurl and turn into a spit-ball)

Use safety precautions always (eyewear, enclosed shoes), safety safety safety,
you want to leave the lab/workbench with everything you went in there with ,
use quality tools (this is a personal thing; I've had non-Xacto knives 'explode' under stress, lucky I had eye protection on),
don't eat food in the lab ,
and, don't cut towards yourself (and make sure others aren't in the line of cutting when you're cutting, especially with power tools). I've accidentally cut myself more times than I'd care to admit, and thats just on minis (wait until you see my attempts at 'furniture' over the years...).
Good Luck!