What exactly is the law of contempt?

I saw that Susan Webber Wright, the judge presiding over the Paula Jones case, is considering holding the President in contempt for lying in his Jones deposition. But she apparently is only considering disbarring or fining him. My questions are:

Is contempt founded in particular law, like perjury? - or is it an assigned general authority to judges?

Response: There are two kinds of contempt, civil and criminal. Civil contempt is used to coerce someone into obeying a court order, like a grand jury subpoena. Susan McDougal was incarcerated for at least 18 months because she would not testify before a grand jury which had subpoenaed her to do so. Civil contempt is brought under a federal statute (28 U.S.C. sec. 1826). Civil contempt is not at issue here, because the judge does not want to coerce the President into doing something; instead, the judge wants to punish him for what he did.

When a court wants to punish someone for behaving improperly, it uses criminal contempt. There is a federal statute on this, as well (e.g., 18 U.S.C. sec. 401). Criminal contempt is a criminal offense, like any other. This means one facing possible criminal contempt is entitled to all the procedural protections (notice, hearing, counsel, presumption of innocence, guilty beyond a reasonable doubt, etc.) one receives in any criminal proceeding.