After College, What Type of Jobs Should One Seek?

Sushant Bhatia asks: "I'm coming to the end of my Masters degree, and I'm on the prowl for jobs. However, there are so many types out there it's just overwhelming for someone who's never had to go through the job-hunting process before. So, what should I do? Should I go for a full-time, contract, half-time, or something else? Also, what kind of position should a person with a Master's in Computer Science be looking for (other than dish washer)? I've been looking at senior software developer positions, but is that too high up the ladder for someone 'fresh' to cope with? My current manager (research lab) says that 'You should always find a job that is above your skill level so that you can learn and be challenged.' I think he's right, but is that something Slashdot readers agree with? What was your job coming out of university?"