for display in category layout update you can use below code , please try and let me know if its not working.
<catalog_category_default>
<reference name="content">
<block type="core/template" name="contactForm" template="contacts/form.phtml" >
<action method="setFormAction">
<form_action>{{baseUrl}}"/contacts/index/post"</form_action>
</action>
</block>
</reference>
</catalog_category_default>
and also write same code for
<catalog_category_layered>
<reference name="content">
<block type="core/template" name="contactForm" template="contacts/form.phtml" >
<action method="setFormAction">
<form_action>{{baseUrl}}"/contacts/index/post"</form_action>
</action>
</block>
</reference>
</catalog_category_layered>
If you are using in your cms page then
Change your cms page like this
{{block type="core/template" name="contactForm" template="contacts/form.phtml"}}
and open your contacts/form.phtml
file and change your action method like this
action = '<?php echo Mage::getBaseUrl();?>contacts/index/post '
/app/design/frontend/my_mod/default/layout/layout.xml