iPhone 4 hotmail sync/setup failing

I have an odd problem on my g/f's iPhone 4. I have set up her Hotmail account (via Microsoft exchange, as per the very helpful advice on here). I set the 'days to sync' limit to none. That seemed to work perfectly and because she never clears out her inbox there were hundreds (or possibly thousands) of emails in her inbox to sync to the phone. I left it run and when i came back it had gotten to one email from about four years ago. It seemed to get stuck there and then suddenly most of the emails it had just downloaded were gone and it went back into the 'checking for mail' loop and then started downloading the same emails it had just downloaded (and then deleted).

I have let it run three times and every time it gets to the same email, hangs for a while then seems to remove all but the hundred or so newest emails and starts downloading them all again.

Any suggestions as to how go get it to work without putting a limit on the number of days to sync?