I ran into this same problem. I read some other post (I used search but it wasn't easy finding what I was looking for.) and the course of action I took was to go into Manage Applications and delete the data on the MyFavs app. After I did this I turned off my phone (by pretending I was watching TV) and then turned it back on, went to Sync contacts and it worked, no error messages.
Now I never use the MyFavs feature on my phone and I have heard where messing with it might F-up the contacts on your phone so go cautious into that night.