Contemporary Jazz recommendations?

Have you listened to Spyro Gyra? If not, give it a try.

I started from Miles Davis' Decoy album along with works of Chick Corea and that was my first introduction to contemporary jazz.
Further on, I'd recommend Miles Davis' Tutu, Siesta(with Marcus Miller), Amandla, Bitches Brew(With Chick Corea), Do-Bop, Aura, You're Under Arrest... Forget KOB, totally different one!
Contemporary jazz, as noted by Barrelchief, is often blended with rock so forming a style of jazz-rock that could attract many R&R and rock fans:
Jeff Berlin, Brand-X(Percy Jones and Phill Collins), Ginger Baker, Bill Brufford's Earthworks, Pierre Moerlene's "Gong", Jan Akkerman and Focus and many many more...

I'd recommend checking out The Bad Plus. Their debut album is quite good and has been favorably reviewed. It sounds modern while still maintaining a traditional piano trio structure. Their originals are strong and melodic, and their cover of Nirvana's "Smells Like Teen Spirit" and Blondie's "Heart of Glass" are also very interesting. Their take on "Smells like teen spirit actually works quite well. They seem to have more of a propulsive rock energy compared to a lot of jazz groups, but they are still very much jazz.

John Scofield "uberjam" *****

I am a big fan of Down to the Bone. If you like them, then I would highly recommend Four 80 East's "The Album" (they sound very much like Down to the Bone). I would also suggest that you listen to Instinct Record's "The Best of Acid Jazz Volume 2." This is a terrific sampler of some recent acid jazz music by a number of artists. I particularly like tracks 1, 2, 7, 9, and 10. I second Barrelchief's recommendation of Gordon Goodwin's Big Phat Band. I like his "Swinging for the Fences" album. While many of the tracks have a very funky big band feel, you will probably really like "There's the Rub."

My last two recommendations are slightly different in flavor but also blend rock, blues, and jazz with funk. They are Galactic (try "Coolin' Off" and "Late for the Future") and the Greyboy Allstars ("West Coast Boogaloo," "Live," and "A Town Called Earth" are all fantastic albums). These are two of the best modern jazz bands out there.