If you use gmail, I highly recommend you log in an organize your contacts. (I am making a group called "Phone" that is the only group I'll sync to my phone.
I've been using Gmail for years and have never bothered organizing my contacts. I've always just typed in part of the person's name I want to email and it of course pops up.
This is because everyone you ever emailed is stored in "All Contacts"
Well, when I got my phone I just had them transfer my contacts from my old phone to my Droid and this got all my phone contacts lumped in the "All Contacts" field of Gmail along with about 400 other contacts I don't want on my phone.
So, my option to not show the 400 other contacts was to select the "Show only contacts with #'s" Works great until you want to have info for people you don't have phone #'s for!
Now if only there would be another address book app released that you can actually browse your contacts IN the groups instead of just alphabetically!
Oh wait, there are a few that do this!!! WOWO!!!