iPhone and MS Entourage 2008

Resetting sync history might help.
Also, make sure all your contacts that are missing photos on the iphone have photos in ical.
If entourage is not syncing the photos to ical, they will not sync to the iphone.

Hope this helps.

I used Entourage X many moons ago, but I no longer use any MS products on my Mac so I have no experience with Entourage 2008. Are you running the current Entourage 2008 version - have you used the MS software update option?

If so, I would try resetting the sync history on your Mac, which is done via iSync preferences with the iSync application located in your Applications folder.

After selecting reset sync history, restart your Mac and try syncing again.