Row by row better? Well, in the sense that if one fails the whole batch won't fail, but then you have no guarantee that all the contacts were updated.
A single-row update can still cause timeouts and deadlocks.
Personally that kind of update I do out of business hours.
Gail Shaw
Microsoft Certified Master: SQL Server, MVP, M.Sc (Comp Sci)
SQL In The Wild: Discussions on DB performance with occasional diversions into recoverability