This is a long one; perhaps a bit confusing, but here goes.
The text/instructions within the asterisks is copied from another post to Apple Discussions:
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If your MobileMe email account settings were successfully transferred to your iPhone via the iTunes sync process, which is selected under the Info tab for your iPhone sync preferences, you don't need to keep this option selected. Deselecting this under the Info tab for your iPhone sync preferences followed by selecting Apply will not remove the email account from your iPhone with the next sync.
If you are syncing contacts over the air with your MobileMe account on your iPhone and you have Sync Contacts selected under the Info tab for your iPhone sync preferences with iTunes, this is not necessary and does nothing but duplicate the contacts on your iPhone.
Deselect Sync Contacts under the Info tab for your iPhone sync preferences along with deselecting Sync Email Accounts followed by selecting Apply.
On your iPhone go to Settings > Mail, Contacts, Calendars.
Select your MobileMe account.
Turn Contacts off for over the air syncing. This will delete the contacts downloaded from your MobileMe online address book and you will be prompted to keep the contacts stored locally on your iPhone. Decline this prompt and wait a minute or two for your MobileMe online contacts to be deleted from your iPhone. This will not delete the contacts synced direct with the Address Book on your computer via the iTunes sync process.
Turn Contacts back on for over the air syncing. You will be prompted to merge your MobileMe online contacts with the contacts stored locally on your iPhone. Select Merge. This will remove the duplicates.
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I followed these instructions on 09Feb. After doing so, when, on the iPhone, I went to Contacts, it showed Groups at the top and All Contacts plus all my groups under that. Tap All Contacts and the next screen came up with all my contacts, with no dupes.
About 8 hours later, computer displayed a window which said something to the effect that I had to replace the Contacts on my Mobileme account. Did I want to copy the accounts from the computer on which the window was displayed or another account. Since that account had an accurate Address Book, I chose to copy those Contacts to MobileMe. This worked; MobileMe has an accurate list of my Contacts.
On my original post, I said when I go to my iPhone > Settings > Mail, Contacts, Calendar > (scroll down to Contacts) > Default Account, I am offered two choices for that Default Account: myname@me.com OR On My iPhone.
This is no longer true: when I now go to my iPhone > Settings > Mail,Contacts, Calendar, the major headings (the ones in gray print on a gray background) are now Accounts, Mail, Contacts, Calendars. Under Contacts are Sort Order and Display Order.
I continue to be able to assign Ringtones to individual Contacts and they all work.
Hope this helps someone.