Post is a bit vague. Several ways to sync contacts - i.e. direct via iTunes to an app on your pc or via cloud service (iCloud, Gmail, Yahoo, etc.). You should update your iPhone to iOS 5.1.1 and set up an iCloud accout for reliable syncing
I want to update my iOS, I want to sync first so I don't lose all my apps, music, contacts and calendars. the only option itunes is giving me to sync my contacts to is Windows Contacts, gmail, or yahoo. I have Windows Live Mail on my laptop and that's what I want to sync too. Is this enough info, sorry for my vague post, I wasn't sure how detailed I should get. Thanx for your help.
Upgrading will erase all contents on the device. It restores some data, just not media files (apps, music, etc). The camera roll is restored also.
Right click the name of the iPhone in the source pane (left pane) in iTunes and select backup.
iTunes should automatically back up the iPhone doesnt remove your accounts, messages, call log, contacts, etc. Those are transferred back to the device after the restore/upgrade.
As for your media, you can right click the name of the device from the source and select transfer purchases.
If you were syncing previously with a different laptop, you can consolidate the previous library and move it to the new computer via a hard drive, it would be like nothings changed.