I have finally fixed this issue after 3 days of mucking about!!! My phone is syncing all items fine now… I stumbled on the solution in a forum for other software, but it seems to apply to WM5, AS 4.1 and Outlook 2003 too!
As per http://www.sbsh.net/forums/lofiversion/index.php?t8892.html, reregister ole32.dll using:
1. Click Start, click Run, type the following command in the Open box, and then click OK:
Regsvr32.exe %Windir%System32Ole32.dll
2. In the RegSvr32 dialog box, click Ok.
3. Reboot computer.
4. Create an appointment in Outlook with notes attached and see if it syncs with Outlook.
The applicable text from the source article is:
The library file ole2.dll, is required by windows and is used when performing OLE (Object Linking and Embedding) operations . OLE allows objects created in one application to be embedded in documents/objects created by a different applications e.g. embedding an Excel spreadsheet inside a Word document. OLE is used fairly extensively in windows applications, so if possible you should not remove this file.
If this file is not registered well, it causes a variety of problems with synchronisation. Appointments and tasks with additional notes do not sync, contacts with additional notes or a picture ID do not sync and other programs like SmartphoneNotes can not sync. I found out that a MS security update in december or the beginning of this year also involved an issue with ole32.dll. Because of this something might have gone wrong with the registration of this file in Windows causing all sorts of problems relating to ActiveSync. (Re)registering this file can solve those problems as it did on my system. Since it´s a Windows file that has to be registered anyway, it can´t harm doing it again hoping it solves the problems experienced.