My D (15 now) was part of the Midwest Academic Talent search (actual took the SAT in 7th & 8th grade), and we also submitted her scores to CTY. So she never took the SCAT, but has been part of CTY. One benefit has been that because her test scores were very high, she was invited to participate in a gifted and talented online chat/forum site for kids that she loves. She has made quite a few online friends, which is good because it can be hard to find peers for her locally.
She has not been to a CTY class; she thought about it this summer, but went to Davidson's THINK instead (in fact, used the talent search SAT score to gain admission to THINK). At THINK she took a course related to public health, and thinks maybe it would be interesting as a college major. She will go to THINK again next summer, but then she ages out. We were looking online tonight for a public health summer program for the next year -- and, CTY had one this summer at Princeton.
We have been through the college admissions process already with her older sister. In short, I would say that CTY membership and attendance probably does not in itself improve your chances to get into college. What it does, though, is give your kid additional opportunities to meet uber-bright kids like themselves, and also to explore academic subjects in more depth than they might in a typical summer program. My D is definitely inspired by her bright online friends from CTY to study subjects on her own (one summer she learned some Latin and read books on the brain because of their influence). I don't recall what the CTY fee was, but whatever it was has been totally worth it to us, and D hasn't even gone to a CTY program (yet).
I would say to go ahead and try for CTY. Just because you sign up for CTY, you do not have to go to their programs if it doesn't match your kids' interests. But I would also say that given your kid's age (SCAT is for 2-6 grade), it is too early to be picking summer activities for college admissions appeal. Let your kid explore what interests them. Likely one or more of those interests will bloom into something they will want to pursue in depth, and THAT is what colleges like best. That may take you into CTY courses, or lead you someplace completely different.
