Also, would it be worth it to have two templates depending on the client: one formal, one less formal?

I certainly believe it's good to have at least two versions of a contract template. I've been burned before (as I'm sure many of us have) thinking a job was small enough that did not require a contract and the client didn't hold up their end of the bargain. Also been burned by friends asking for services that I didn't feel comfortable enough running after for the payment.

So my answer is "Yes", create different contracts that tailor to the different levels of comfort with the client. Perhaps you change the tone in one version for the client that's a friend.

In the end, just be sure to protect yourself no matter what the job or the client!

Is there a particular guideline to how formal/informal a contract should be?

I think you've gotten it down correctly. The template I use has 6 different sections:

1. Description of Parties
2. Description of the Services
3. Compensation
4. Liability
5. Arbitration - (what should happen in case either party should file a claim)
6. Signatures

Also, would it be worth it to have two templates depending on the client: one formal, one less formal?

I certainly believe it's good to have at least two versions of a contract template. I've been burned before (as I'm sure many of us have) thinking a job was small enough that did not require a contract and the client didn't hold up their end of the bargain. Also been burned by friends asking for services that I didn't feel comfortable enough running after for the payment.

So my answer is "Yes", create different contracts that tailor to the different levels of comfort with the client. Perhaps you change the tone in one version for the client that's a friend.

In the end, just be sure to protect yourself no matter what the job or the client!