Totally agree, I had a huge panick situation yesterday, I tried to uninastall iCloud because it was messing up my Outlook contacts, and suddenly all my contacts were gone. Tried serveral things, then all the contacts on my iPhone were gone too... After 2 hours of messing around, re-installing iCloud, dragging all my contacts back in my normal Outlook contacts folder, then de-installing iCloud again, I finally have everything back to normal (had to delete some double contacts but I was so relieved I didn't care). Maybe it had to do something with Google Calendar Sync running in the background? But that's not syncing contacts, so don't know why that should interfere?
I don't think this is a pretty solution for Outlook users, feels like a way to force us to abandon our own way of working with the programs we like. No thank you, Apple. After the horrible update to iOS 4, I already had my whole calendar messed up thanks to their daylight savings time bug (which they NEVER admitted to).
I'm switching to Android just as soon as my current cell phone contract allow me to.