Anton Chuvakin has an interesting post on competitive differentiation. He links to a great post on Michael's blog which talks about the three main competitive models described in The Discipline of Market Leaders (which everyone should read).
What is most interesting is that none of the three models are really focused at all on competition. It always strikes me that we focus on business as a Zero-Sum Game rather than the Infinite Game that it actually is. If I do business excellently, it in no way precludes you from winning - indeed, if we both create a significant amount of value, there will be enough customers for both of us.
It's for that reason that I always find it a complete waste of time when I see companies playing stupid games with their competitors (like blocking their websites and the like), like both Anton from LogLogic and TK at nCircle both have seen recently from their respective competition. I can think of other examples (e.g. cease and desist letters for too much email from one company to the other), and, in all cases, the focus on the other company takes away from their focus on adding value to their customers.
I can't think of a successful business that got that way by doing anything but creating massive amounts of value for their customers.
As an aside, please let me know if you find out who these companies spending their time blocking DNS of their competitors are - I want to make sure that I don't end up as their customer, because I know they'll be too busy playing silly games with their competitors to listen to my needs.