Sure, you can use Pandora or just pick a genre on iTunes, but nothing beats a customized playlist. It's much easier to make one than you might think! Here's how I do it:
1) Decide what type of mood I'm going for (learn more about Mood and Music in this previous post).
2) Sort my iTunes library by artist.
3) Make two blank playlists called "party" and "party maybe"
4) Quickly scan through the artists. If I find an individual song that I know will work, it goes in "party". If I come across an artist that has lots of potentials, I dump them all into "party maybe".
Completing those steps takes 20 minutes, maybe less (I have about 5,000 songs on my iTunes).
5) Over the next few days, I listen to "party maybe" on shuffle. As I find songs that work, they go into "party". Before I know it, I've got a good 5-6 hours of hand-picked music for my event, with hardly any effort!