You need the synchronization enabled on both sides. The BES has a "BlackBerry Synchronization Service" that needs to be with the BES Service Account credentials (with appropriate ACLs in place on the server-based copy of the user's contacts) and the handheld needs its "Desktop [SYNC]" service book. If either piece is not functioning, the address book's contacts will not synchronize.
As a side note, we've also had problems in some cases with individual address book entries not synchronizing if any of these fields are missing: firstname, lastname, companyname. All three fields should be populated for every user. It gives some nice busy work for the guy or gal's secretary to do!
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Domino 7.0.4FP1 | BES 4.1.6 MR-7 | 42 handhelds
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