First I'd go in and turn off the PUSH and then you'll get a message that says everything will be deleted on the phone, after you've done that press the top button of the phone and restart, after restarting the phone go back in and turn PUSH back on and let it populate your address book again. This should have fixed that part (did for me and I'm not entirely sure that a restart is necessary but it's what I did).
The favorites the only way that I could fix this was to actually remove them from the favorites list and add them again.
Hope this helps and for what its worth I haven't experienced any other problems (knock wood).