Finally, a question I know a little something about!
I have learned, over the years, that a hole dug in the ground and surrounded with whatever, tends to cave in. The ground around the inside will dry out and crumble and eventually, the hole gets bigger and the pavers or whatever tend to crack. We found a solution about 5 years ago. We dug the hole (in our city, it can't be more than 3 feet in diameter) and lined it with sheet metal. I don't know what thickness we used, but we were barely able to roll it into the round shape that we needed. We sank the sheet metal in so that it was about 1-2" above ground. (in our case, the hole had to be about 2 1/2 - 3 feet deep) Then we used large stones (river rock?) to surround the outside. The purpose of the lip above ground was so the rocks wouldn't get bumped and fall into the fire. It has worked great. The depth is nice because we don't have to shovel it out very often (every other yearor so-and we have a lot of fires) Some of the rocks are just now starting to crack, but not too bad. We use this firepit for larger things that we have to burn or when we have a lot of company.
We also have an iron chiminea that we use for just a little relaxing fire. It has the wire mesh so you can see the fire from all sides. It's nice, but you're very limited to the size logs that will fit in it and it doesn't put out a lot of heat unless you're right up next to it. It looks nice but it's a pain to move (no wheels) and your hands get black.
Some friends of ours just got a portable firepit that I really like. It's about 2 feet diameter, sits up off the ground, has 2 wheels (like a grill), it's enclosed with the wire mesh and has a cover. I like it because it holds more logs and puts off pretty good heat. I would get that one instead of our little one next time.
Hope this helps.
Ruby