My '93 Mark VIII had a similar problem. The cruise was working intermittently for a while, and then it died completely. I didn't really care too much, so I let it slide. Then about 2 weeks later I went to the garage after the car had been sitting for several hours, and it was full of smoke. I had no brake lights and couldn't shift out of park.
It turned out that there is a switch on the master cylinder which deactivates the cruise control when it sees brake pressure. Stupidly, it always gets power even when the car is off, and is susceptible to shorting out. Mine had burned up and melted a bunch of wires together. Cost me about $500 to have it all fixed. The mechanic said I was lucky considering it could have burned up the whole car.
Ford recently had a major truck recall because of this very switch. Cars were not included, which I think was highly negligent considering this problem is capable of starting a fire even when the car is not running.
I do not know if our Contours have the same crappy setup, but I'd recommend getting it checked out if you continue to have any problems.
