Stop! First, you need to confirm that your contacts are set to sync.
Click on your iPhone icon in iTunes, and find the, 'Mail, Contacts, and Calendars' tab.
Confirm that the box is checked to sync contacts.
If the box is not checked, DO NOT CHECK IT OR YOU MAY LOSE YOUR CONTACTS!!!
First, sync and backup your phone.
Now, go ahead and check that box. Your phone's data will be overwritten by the data in your contacts app.
Now, right click on your iPhone's icon (or Option click), and select, 'Restore From Backup.'
If you're given an option, select the backup that you just made a moment ago. Your contact info will return to your phone.
Sync again, and it should now go to your Contacts app.
From here on, you'll be fine.
It works even better if you have a Mobile Me account.
