Hi Betheny,
There is really only one way to create/update a Contact from Form Processing steps. This is to use either the "Update Contacts - With Form Data" or "Update Contacts - With Custom Values" form processing steps. Depending on your needs you may need to use both. The Update Custom Data Object form processing steps are to be used to update Custom Data Objects (CDO's). This is related data that DOES NOT sit on the Contact table. I believe that it's best practice to have every contact new or existing hit the create/update contact form processing step. As a form submit is a very deliberate hand raise from your contact, any additional information that they are providing tends to be very high quality and accurate. Again, this information is very general. If you're doing anything outside of the box you may need a little more guidance. Let me know if you have any questions.