Need contact recovery/update help

I am trying to help my neighbor update her IPhone 3G from 4.0 to current ios6.0. She never did any of the updates.Verizon rep says to go home, hook up to ITunes and backup the data on the phone. We did this and also updated to the newest version of iTunes before backing up. All apps showed that they backed up but we could not tell if the contacts did. Rep says he has never seen anyone backup and lose their contacts. We were then to reset the phone and restore the files after this. We did this and all the apps restored but no contacts. The phone shows nubmbers in the favorites and all called and missed calls but no contact names or numbers. Is there a way to recover the contacts somewhere in ITunes? The phone will also go through the update system but will not update. if this phone now too old to accept an update because of never doing any updates? If so I would have assumed the sales rep would have known this, Any help would be appreciated.