The iphone 3G receives Mail, and Calendar updates from the exchange server, but no contacts. You can add a contact from the iphone and this gets pushed to the exchange server. But, when you add a contact or make a change to this newly added contact, this does not get pushed back to the iphone.
Strange!!!! We solved this difficult Microsoft 2003 Exchange & iphone issue. Call us today for your solution: 480.440.4650