I've had both good and bad experiences contracting.
Good Experiences:
* Variety of work. I've done contracting work from writing sophisticated parsers to financial computations to high-precision arithmetic libraries.
* The pay can often be better. Dollar for dollar, I've made as much as 75% more by contracts.
* If you're an excellent worker, you can develop many good connections.
* Contract work can sometimes lead to very good full-time positions. Sometimes known as "contract-to-hire", an employer might decide they want to keep you on board. (Unfortunately, your pay will almost surely decrease in exchange for stability.)
* Often you can work in the comfort of your own home on mostly your own time. Usually you're under no obligation to work a specific set of hours during the day at a specific location. All of my contract work has been remote.
Bad Experiences:
* Often don't feel a part of the company you're working for. Often feel excluded.
* Time tracking (if hourly based, which it often is) is annoying. Some services make this a lot easier, but it's still a pain to clock in and clock out every single time.
* Short to medium term contracting means you need to constantly be on the lookout for work. This, in turn, means you need to dedicate a good portion of your time applying for places and seeing who wants you.
* (In the USA) Have to deal with taxes. You might be getting paid $X but you must remember to reserve a portion of that to pay off later.
* Typically no benefits, like health insurance. This may be less of an issue outside of the USA.
* Not all employers are as nice as they seem. I have had my contract work terminated a month early because I finished a month ahead of time. They said I had no other work I could do to bill them for. Depending on where you live, a month of unexpected loss of life support can mean a lot. For me personally, it about drained what I saved up during the term.
* Short term contract work can sometimes look poor on your resume/CV. Even though any reasonable person understands what contract work is, seeing many companies on one's resume can often give the impression of lack of loyalty and lack of determination.
The Bottom Line
For me personally, I prefer full-time work, only because it is much more stable and I don't have to seek out work later. If you have significant delays between contract, and depending on where you live, your money supply starts depleting fast. While it's enticing to get paid, say, $6000 a month, if you have a 3 month delay between contracts, and each month you have $3000 in expenses, then your effective annual income is decreased by $9,000.