I think I am having a similar problem to the OP on this one. My HD2 was initially synced with MyPhone to get contacts from my old Touch Diamond. When I went to sync with Outlook (not on Exchange server), the device starts syncing, goes through the list of items to synchronize, starts work on the contacts, gets to about 95/434 then says "processing". At this point, if I check the contact list on the phone, some, but not all of the contacts have transferred. After about 20 minutes of "processing", the phone comes up with an error report for "services.exe" and Activesync reports a problem. Viewing the status of the problem on Activesync shows error code 86000108.
I have tried deleting the partnership on Active sync and asked it to replace data on the phone with that from Outlook when setting up the new partnership. I'm not sure what else to do and am getting a little frustrated because soon I might actually want to update a contact's details and I'd like it to sync up both with the phone, outlook and backup on MyPhone too!
Any help much appreciated!