I wouldn't call Gilderoy incompetent, taking into account that he did keep up his scheme for a long time, that he'd have to trick wizards and witches with more skill than he had into sharing their stories with him. He certainly did possess a healthy dose of cunning to pull all that off.

Like you say, most people wouldn't have the chance to analyse him on a one-to-one basis though, which makes me wonder what on earth made him think he could pull off being a teacher at Hogwarts, what he was looking for there. It seems like such a step down for him, to be a common teacher.

He could very well be a Slytherin, though Gryffindors can be rather scheming and cunning as well. I don't think that is something that is specific for Slytherins.