Best way for me was to specialise in an area. Sounds limiting, but agencies are often looking for specialists to come in for 6 months, sort out a problem and go - thats how I find it.
As the others say, you really need to be unemployed and ready to go if you are to land a contract - a tricky choice if you are perm. with lots of overheads.
Ask your IT dept what they expect from a contractor without sounding too suss!!
Then ask yourself if you have the required skill level. As with anything, the first few contracts will need you to blag a bit - never say you don't know how to do something - 'No' is not a word in the contractors dictionary, rather.....
ummm, thats an interesting idea, let me check some other examples and get back to you!!!