1. This is how I prepare my droid for a rom. I got it from Liquid.
http://android.markjohnston.us/DL/LFY/RNOTES/installation.txt
1) Reboot into recovery (ClockworkMod Preferably or SPRecovery)
NOTE: If you haven't already done a backup...do one now. I always perform my backups via ROM Manager so I can properly label my backups. If you need to do a backup at this point it will work exactly the same way but it names your backup with time and date information (you can rename the file later)
Here's how to create a backup in ClockworkMod Recovery
From the main recovery screen, go to: Nandroid and then select "Backup"
2) Select "wipe data/factory reset" - This will actually format your Data, Cache, and SD-ext partitions
3) Go into the "partitions menu"
4) Format "Boot"
5) Format "System"
6) Go back to the main screen (power button backs you out to the previous menu)
7) Install zip from sdcard
8) Choose zip from sdcard
9) navigate to where you have stored the zip file and select it (no need to rename the file)
NOTE: You can do the same thing if you are using SPRecovery (you will need to rename the file to update.zip) but you have to format partitions using ADB shell (there are no menu options to format partitions like there is with ClockworkMod).Then try re-flashing BB.
2. Your contacts (and apps) will load after the sync icon goes away.