l had these exact issues after upgrading my 8700 to 4.2. lt was as if the phone could not recognise the address book so any numbers l rang were unrecognised, sms also went, they would leave but not deliver, s'pose there all floating around in hyper space, l don't know. Anyway determined not to loose my new desktop l spent the last 2 days, (while the forum was asleep), trying everything l could think of to remedy this situation. What l found was people could ring or sms in, that was ok. You replied to their sms or call and save this message contact to your address book to replace the one you have. Problem for this number only solved, l can ring,sms from the address book. Well this is ok if you only have a few contacts, get them to sms you and reply/save address but l was determined to find out why. Upon examining the new numbers l had saved l very quickly noticed that in the case of mobile or home numbers the zero or area code had been replaced with the country code, in my case, +61. l solved my issues completely by editing all the numbers in my address book this way. Phone works better than ever, l hope it stays this way. l'm not sure if this action will resolve your issues but maybe it's one of the new built in quirks with 4.2.
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