Perhaps Steve (ozraves) can back me up on this, but I believe that one of the parties must have some form of contact in order for the parties to be able to actually dispute the contract in California or NY (foreign jurisdictions). That is, in order for CA or NY to have jurisdiction over either of the parties, one of the parties must have some minimum contacts in that state. With labels, this is not a problem, because they often have offices in several major music cities. You are always free to have a choice of law clause from another state, but that comes with a few issues.
For two guys living/working in FL, signing a spec deal in FL, there is a tremendous benefit to having the Florida law govern the deal. The most important reason for using FL law is that if a dispute arose with the contract and the parties disputed the contract in a Florida court, the parties lawyers would have to brief the FL court on the subtleties of CA or NY law. This may not seem to be a big deal, but it will likely result in greater time in court and greater expenses for the parties (just to dispute the thing)... thus furthering the notion that the law generally screws people to a greater extreme.
Nathan, I know a few good FL Entertainment Attorneys (that really do this stuff). Louis Tertocha (great advocate and tough customer), Carolyn Herman (great lawyer), Julie Milham (really knows her stuff). I met them all at a music law conference in FL last year. All should be very capable attorneys for this deal. You should also check out the Entertainment Arts and Sports Law Section of the Florida Bar for more references. Look here:
http://www.easl.net/Documents/02committees-page39.pdf and here:
http://www.easl.net/ 
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