Josh,
As you see, we changed a couple of things with the contour labels in 2008.
1. The layer for the contour labels is controlled under "Drawing
Settings" -> "Object Layers" -> the "Tin Surface - Labeling" object.
2. For the label line, those shouldn't print show it doesn't matter what
layer they are on. Better still, there is a new option to only show them
when you are editing the labels so you don't have to worry about them. You
can control the visibility of each one, but I would go into the Command
settings for surfaces, and under "AddContourLabeling" turn "Display Contour
Label Line" to false. (to answer the question, the line goes on the same
layer as the label)
Cheers,
Peter Funk
Civil 3D Product Manager
Autodesk, Inc.