Basically, the way sync works is that it will update whatever is the newest data. So if you change something on your computer, iTunes will see that as the latest change and modify the information on your iPhone upon the next sync. And vice versa... update a schedule during the day on the go with your phone, and iTunes will see that change and update the computer database.
Now, if you're planning on doing mass-delete operations (getting rid of a bunch of things), I would recommend first backing up your Windows Address Book just in case anything goes wrong. If you accidentally erase stuff, the iPhone does not have a backup. So play it safe.
There is an option in iTunes under device settings that allows, only on the next sync, for data on the phone to be overwritten by data on the computer no matter what. Use this in case of catastrophic failure with your phone... if you do something on the phone that somehow deletes contacts accidentally, you will want to check this option so that upon the next sync, the data flows from the computer to your phone instead of being deleted from the computer.
It is confusing, but I hope that made sense.
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