This should only happen, when you first connect the 2 sets of contacts with each other and accidentally dont "merge". Or you select to overwrite in the advanced settings of the info sync tab in iTunes.
If it happens otherwise you have a sync issue. Try this:
1. Reset the iPhone by pressing and holding the sleep/wake and home buttons and releasing them, when the Apple logo appears on the display. Now test again.
2. If the issue persists: test the sync with a newly created admin user on your computer.
If it works fine there you most likely have a defective Outlook pst file and you should continue troubleshooting there.
look for security software that might disturb ( http://support.apple.com/kb/TS3125 ) and look for incompatibl
Also ensure you are compatible:
Compatible PIM Software for Syncing
Microsoft Outlook 2003 - 2007 - 2010