Daniel McOrmond won the Twilio SMS Contest with his Traffic Amigo app, which uses traffic data from Mapquest's API and integrates with Twilio for SMS alerts. The app is built using CakePHP and MySQL, and the integration with Twilio was seamless due to previous experience working with the platform. The idea for the app came from a boss who wanted SMS reminders for his youth football team, leading to a discovery of Twilio and a long-term partnership.