I couldn't figure out how to do this either. I hooked up my new 4S to iTunes today and it stuck about a gazillion apps that I do not want onto my phone. I couldn't figure out a way to do it so I'm now in the process of restoring my iPhone from a backup.
I either always get duplicate contacts, randomly erased crap off my phone, or stuck with every app I've ever bought.
iTunes is so annoying in this regard. It has never ceased to amaze me why iTunes can't just be intuitive in being EASILY able to sync/transfer exactly what you want and only what you want. I guess I must be a moron though because the masses never seem to have trouble with it.
Right now I only want my old contacts back on my phone and don't really care to transfer over all my new pictures and crap but can't figure out how to get all my old contacts without restoring the whole thing to a previous backup.