Freelancers -- where do you find most of your work?

@Karyn - best of luck. Let us know if we can help you out as you leap (and it IS a leap).

@Todd - Sorry to say, I don't have my own contract template usually the client has one and I sign theirs. They are usually more conservative than I am, wanting to ensure that I have appropriate worker's compensation insurance (in case I get injured while working for them and try to collect disability payments) and if it's a government client then there are reams of paper, terms, clauses to contend with.  I tend to avoid the government contracts or go in as subcontractor with an IT/Systems firm or larger consulting org who can own the risk. For smaller organizations, contracts are fairly straightforward and may be as simple as a one page description or an email. As long as it outlines the statement of work, which is the basic gist of what Jeannette posted. Mine also has specifics on review expectations (turnaround time and number of reviewers). Then I have business insurance (including "errors and omissions", much like Bruce described) to cover me just in case.  However, I am in Canada (and Bruce is the UK) where we are far less litigious, so not sure if that's helpful to you or not.

I almost always split projects into 2 phases: one for scoping and analysis to confirm estimates ante the second is to build the thing that we agree to. I don't tend to take any payment up front, but usually we divide the payment up by milestones, with the largest coming on completion or sometimes on a monthly basis if it's a longer term contract or less defined in terms of deliverables (not everything I do is e-learning). 

Not sure if this helps, but check it out anyway: http://speckyboy.com/2010/08/12/5-free-to-use-freelance-design-contract-templates/

Holly