One of my largest problems with Urban Dictionary is that since it is so free-form, there is no guarantee that the content of the site is particularly urban (the denotations of 'urban' being quite different from the connotations, anyway). In the past, while searching the site, I did find some items that seemed to be genuine slang (if such a classification makes sense. There are actually some words in there that will help you understand the fast-paced world of drugs and crime). Some of it is widely used, and well known (at least inside of the subculture it is part of).
On the other hand, most of what I read on Urban Dictionary, especially in their word of the day mass mailings seems to be contrived. For example, in the past few weeks, I have been presented with compunicate, one-upper, libby, mental constipation, hobosexual, manther and to the dome, slang that I have not heard used in regular speech, and that I doubt anyone, even those in the fast lane of our evolving society, really uses. In other words, I get the feeling that Urban Dictionary is full of suburban stoners and heavy internet forum users, trying to pass off something that they and their friends came up with at 3 AM as something that is widely used.