Big 3rd Ed changes...
I'm going to guess some of the posters on here played using 1st and/or 2nd Ed. Or worse, using the modified FR spells from Greenwood and Co. that allowed for all kinds of "hanging" and "contingent" and "held" and "multi-layered" effects! I think the 3rd Ed version of Contingency is intended to be VERY different from it's predecessors. It's still a good, viable spell however. Think of contingency as a "free action" bonus defense spell. It takes very little to trigger it, however, you must state a clear and specific trigger. Therefore, contingency is not intended as a "countering" measure or action. You can't contingent dispel, nor can you contigent teleport to prevent or save you from damage. You can, instead get a free teleport off, at the end of a full round of action (ie, contingent to a single word) Therefore, it's more like this...I'm hasted, I cast my main spell, my hasted spell, my quickened spell...and my contingent teleport whisks me away! The closest thing I could justify as a DM, which would allow contingency to "prevent" an effect would be with the "feather fall" or fly contingencies. How does a spell know when you're falling, or when you've fallen 30 feet? I'm not sure, but it certainly isn't unbalanced in this situation. Another key use for contingency is to get off that first...always cast...defense spell (like Stoneskin). Contingent, when I say "blah" which activates my staff, cast mirror image on me. This saves you a step in the process, and makes you more prepared for the encounter. Sweet. The spell is still useful, just not supremely powerful.