There are generally three types of contrast filters: low contrast, soft contrast and ultra contrast.
Low contrast works by spreading the light from the highlights to the darker and shadowed areas. This leaves the bright sections of the image bright. The dark areas will become lighter, allowing you to see greater detail in the shadowed sections. These filters may also create a slight flare or halation around hot spots and light sources. This can be a useful effect as the more light there is, the greater the effect.
Soft contrast filters reduce contrast in the opposite way of low contrast filters. They absorb light diminishing the highlighted sections while keeping the darker look of the shadowed areas. So the hot spots or bright areas are reduced and the shadowed spots stay dark. This results in a reduction of contrast. These filters also cause a slight flaring or halation.
Bright light can cause problems when the ratio between the highlight and shadowed spots is beyond the scope of your film. If you expose for the highlights, the shadows usually appear without detail. If you expose for the shadows, you usually get washed out, overly bright highlights. You get contrast reduction by lightening the shadows without overexposing highlights or by darkening highlights without further darkening the shadows.
Ultra contrast filters work by using the ambient light around the image along with the light in the image area itself. The filters lower contrast without losing sharpness even when there are different degrees of brightness within the image. Shadowed sections are opened up, showing more detail, but without flare or halation from light sources or bright reflections.
Contrast filters come in assorted sizes and range in price from about $40 to $250.