I just cleaned up a bunch of duplicates in Outlook than synced it over to my phone. Unfortantly, there is no science involved. Basically I sat at Outlook and the duplicates were right next to each other and I deleted 1 of the 2 files. Sorry I wish than and I wish now I had a better answer.
ps: If you do it this way in order to insure the duplicates are removed from your phone during the sync I recommend that when you sync in iTunes, check off the box that says "replace contacts on the phone with contacts on my computer" It will give your phone a fresh copy of your corrected contacts. You only do this 1 time.