Woo-hoo! For $4/month I found a solutuon I'm very happy with.
The trick: rent Microsoft Exchange Online. It syncs Outlook and iDevices perfectly.
I'd always avoided using Exchange in the past because I'm not a huge corporation, and I'm happy with basic POP or IMAP mail. But Exchange works very well for individuals, too, and it's not expensive anymore. In fact, it's even free in some cases. Outlook syncs with it very well, naturally. But to my surprise, iDevices play well with Exchange, too, because Apple wants iDevices to be popular in the business/enterprise market.
Exchange replaces iCloud. You don't need (or want) to install iCloud Control Panel on your PCs. Instead, add the Exchange server to your Outlook settings, and voila! calendars and contacts sync up smoothly. Likewise, tweak your iDevice's settings to add the Exchange server and it syncs up nicely. In short, it works like it's supposed to.
You don't even need to mess with the e-mail servers or addresses you use now. Just add Exchange; don't replace anything. I don't bother using the new e-mail address that came with my Exchange account. I use the service merely for syncing calendars and contacts. E-mail stays the same.
The only downside is the $4/month fee. But that's cheaper than MobileMe was, and it works better. And it's not a hack or a kludge. Microsoft and Apple both want this to work, and they support it well.
Better still, if you're planning up upgrade to Office 2013 anytime soon, you can eliminate the Exchange Online rental fee and replace it with a free Outlook.com account.
Tech details: What you're looking for is a server or service that supports Microsoft's Exchange Active Sync (EAS). That can be either a physical server running Exchange Server or a service called Exchange Online. Either works. There are several places that offer access for $4-15/month, including Microsoft itself. Google Apps (the paid version) also supports EAS, though not very well.
All versions of Outlook will sync with EAS. In fact, they prefer it. All modern iDevices sync with it, too, so it's easy to get your contacts and calendars (and e-mail, if you want) to sync between platforms.
The Outlook.com website (formerly Hotmail) also offers EAS, and it's even free. The only hitch is that it doesn't currently sync with Outlook 2010 or earlier, only Outlook 2013. So until then, I'm paying for Exchange Online at $4/month. When Outlook 2013 comes out, I should be able to cancel that and switch to a free Outlook.com account.