There may be a situation where there is an audition you want to attend with a casting director that you
Having separate reels for separate genres can be helpful when linking to specific auditions or casting directors and agents. Generally you should have one for drama and one for comedy with an additional commercial one if applicable. Commercial reels should be accessible to only casting directors or agents as clients may be worried about commercial conflicts that are no longer applicable. If you do not have enough work to do separate reels, look at the clips you do have and see if they can work together effectively.
Try to keep your reel around or under two minutes. Some people even do a "sizzle" reel that is only one minute. Either way, it's best to choose only your best work, even if that's two clips, and not clutter the reel just to show more work. Having two strong clips, rather than five mediocre ones, will give you a stronger punch. Starting a reel with a montage of you in other films is fine but keep it short.
Have a sample of live work if you do not have any film credits. Make sure it is a professional production and not a scene you performed in a class. Work on student films to help build a collection of work and help you get you comfortable on set.
Have DVD copies on hand to give to whoever may want one. However, sending a link or including one in your online resume is usually easier, faster and cheaper. Also, people may be hesitant to use DVDs because of potential harm to their computer. Make a personal YouTube or Vimeo account and have your reel accessible there.
If you have the editing skills, you can put your own reel together. Show the finished product to entertainment professionals to get some objective opinions on it. There are also plenty of companies that specialize in reels. These services know how to take the clips you provide them and organize them effectively. They are often expensive but worth it. Research several different companies before choosing one to work with.
There are plenty of actor reels online. Watch other actors' reels to get an idea of what you like and what you don't like before approaching someone to put it together. Be as informed as you can before putting any money down.