Actually, that's a very interesting question, and obviously one that was never taken into consideration when the author *ahem* wrote up the various Challenges of Champions (for the simple reason that all of the adventures were written before Eberron was released).
That said, I see no reason why warforged would have to be banned from participating in a Challenge of Champions adventure. However, as Saeviomagy pointed out, the proctors would be watching to ensure that a warforged did not use any special magical properties imbued in his body armor, for the same reason that fighters cannot wear magic armor (or any armor, for that matter), and contestants cannot bring in their magic items, thieves kits, animal companions, familiars, or whatnot. The intention of the Adventurers Guild is for each team of four contestants to be playing on as level of a playing field as is possible. A warforged contestant would be warned not to use any of the special properties of his body armor, and if he was caught doing so anyway, he would be immediately declared "dead" for the remainder of that scenario.
Actually, it's getting more and more difficult to come up with "level playing field" scenarios, now that people can play PCs of so many races - with Savage Species allowing things like troll PCs, there are quite a few races whose inherent special qualities can make some of the scenarios somewhat of a cakewalk.
Johnathan