The winners are most often low-profile professional magicians who make a significant income consulting for the famous ones. Inventing and selling tricks is an important revenue stream for many magicians.

So they come on, do some trick that they invented in secret and worked on for years, and give P&T that same childlike sense of awe and amazement that the rest of us experience almost all the time. It's the best part of the show.

Like this guy: https://www.youtube.com/watch?v=LyZp4sPqBAI

I've watched the show a few times and I don't know how carefully detailed the rules of success vs failure are, but on a few instances, Penn and Teller announced they had a fair idea of what tricks were being done but couldn't really place it in an acceptable order or say the how/when.

So even if Teller is the magic encyclopedia, he can be fooled, it seems.