Hot Streaks are basically races to see who can amass the longest streak in a particular variant within a 30 minute time limit. Thus it's a pretty small investment in time. It's a test of speed play, and with the more difficult variants, a test of your raw solving abilities.
Everyday brings a new variant with the variants starting easier on Sunday and getting progressively harder thoughout the week.
Hot Streak games, like tournament games, do not affect your regular streak. So play as recklessly as you want, it won't affect your main scores.
Everyone gets random deals so no two players play exactly the same games. They just play randomly dealt games in the selected variant and difficulty level.
One strategic aspect of the Hot Streak is the "try again" option which allows you to wager that if you have another go at it, you can do better. The reason for this is that typically Hot Streaks come in around 15 or so and that's not enough games to have a likely good overall difficulty match for everyone who's playing. You might get a bad set of deals with one or more really tricky ones, whereas your competitor might get an overall easy set of deals. To make things interesting, if you feel you went down because of a bad set of deals and you wager that you can do better, you can try again. If you do worse, sorry, that's your result for the day.
The following criteria in order decide the winner: length of streak, elapsed time, and number of tries. Thus if two people tie on streak length, the one with the lowest elapsed time wins. If somehow they have the same streak length and elapsed time, then the number of tries is used. And finally if all those things should happen to be equal, it's totally arbitrary.