Contours are a great way to quickly view an area and get the feel for the lay of the land. And the better the source data, the more you can do with them, from reference to planning. Recently we used data derived from LiDAR to build a county-wide contour layer. The reason we went with LiDAR data is that the accuracy is usually much tighter (and more recent) than existing elevation information.
There are obviously different methods and tools to do this but here in Illinois we are fortunate; ISGS has done a fantastic job of working with counties and vendors to acquire LiDAR data, then process it and share it with the public through the Illinois Height Modernization Program. For GIS users the available data even includes prepared ArcMap documents with layers derived from classified LiDAR. Very nice. So with this information and some help from ESRI’s Contour raster function and Spatial Analyst, as long as processing power and disk space are available, you can build and fine-tune contours for fairly large areas.
It should be noted that LiDAR and elevation data can get pretty large in terms of storage space needed, not to mention any downloading or transferring of files. And you may find if working with larger areas, that processing data in parts or sections at time is necessary due to software limitations or time constraints. These things may pose challenges, to find the right fit for your needs and workflow(s). Overall however, this has been a great example of where open data meets ever-improving technology.