I am using groups, I do have MobileMe, not sure if that makes a difference
In my address book on my mac I create the group and copy the people into it
on the phone address book i click at the top where it says groups, this then shows al the groups
I beleive it does not work with smart groups, tried it once and it didnt work
same, although i'm only using itunes sync, not mobilemeThis is the same for me; my contact groups from my mac are on my iPhone. I am using MobileMe also.