i finally got sick of outlook on my phone transferring contacts to the avic last name first, even though i have them sorted by first last. so i put the first and last name in the first name slot. 
well they are sorted now by first name now on the avic.
keep in mind i haven't been able to get contacts voice recognition since transferring after the 2.0 update.
so i tried removing the outlook formatting (xxx) xxx-xxxx. that didn't work. if the number was 10 digits, it automatically puts the formatting back in. so i put a 1 in front of each number and that won't put formatting back in. but voice recognition still doesn't work.
the only time i've ever got voice recognition to work, is when i did this hack: http://avic411.com/forum/viewtopic.php?t=18248
the only thing i don't like about this hack is this:
a unique numeric key is assigned to each contact. let's say you have 100 contacts. however you have them sorted on the avic (mine are now truly alphabetized by first name) that's how they get their unique key. so "anna" let's say is 1, and "zachary" is 100. now what happens when you add a new contact? that person, no matter what their name is, will have the unique key of 101. and that's where they go on the avic; after zachary. what a pain in the @$$. oh you could re-edit each contact in
http://www.sqliteexpert.com/download.html and move the unique keys and each contact up. but it's really not worth the time if you've got a ton of contacts. or maybe the solution is this: "hey girl. i know you're hot and everything, but i can't add your phone number to my phone. you're gonna jack up my sorting on my stereo!". 
so i think i'll just keep adding contacts with putting a 1 in front of the number, and just use the touch screen to call contacts up? i will try editing the phonebook with sql lite sometime this week and see if there's a good solution when adding new contacts.