I have no clue, but don't think resolution is all that crucial.
Even a low-res picture can help preserve an important memory. Or something that makes a good phone contact picture may likely also make a good avatar for flickr, twitter, etc, and it would not need to be full resolution for such purposes.
Nothing taken with the iPhone is all that high-res anyhow. IIRC, pix assigned on the phone show up full-screen, so it's probably not as low-res as the teeny photo assigned on the desktop and transferred via sync.
Incidentally, google turned up this method of retrieval, using the Mac:
If you click "edit" on the contact's entry in Address Book and then double click inside their picture, it will appear as a somewhat bigger version, which you can copy with command-C. But it's a far cry from full-resolution.
http://forums.macnn.com/103/ipod-iphone-and-apple-tv/341591/iphone-contact-photo s-how-to-extract/
I can't test it, though, as I don't sync contacts, and really have no clue whether the iPhone sync contact pictures to Outlook on Windows, which I assume the OP uses.