I had the same problem. I noticed that when I uploaded my phonebook, the system would assembly the book just fine -- however during the upload phase, it would start to upload, create a small ball on the horizontal thermometer, and than hang. It appeared like the process started OK, but than got hung.
I envisioned some gatekeeper letting me in, but than later slamming the gate shut. The only gate keeper I could think of the process was my credit card. I checked out the details on my CC data on file with iPhoto, only to find my actual my credit card had been updated with a new expiration date, but the iPhoto data had not.
I brought the iPhone CC data up to date and my phonebook went right through!
What made the problem difficult to find is that the system never issued any error message. It just hung. But I am OK now. Thanks for all the posts.
Nortske