There us the alternative of Nuevasync. They operate their own Exchange->Google proxy. I don't know how it compares to Google's as I was using it before Google had their own.

We only sync calendars as our experiences with contacts have been the same. The addresses are the killer, they don't survive the round trip intact as Googles addresses are free form.

I wish I could find a workable way of syncing contacts between iOS devices. That said I haven't tried MobileMe or my own Exchange server yet.