Another question, my contacts under "people" on the Hero are not syncing to Gmail. I validated I have everything selected to sync to Gmail. Any suggestions on what I might be doing wrong?
If it was me I wouldn't even bother with gmail, but some people like the convenience/inconvenience that storing things on the internet brings.
I would use the process I outlined in my post above and just export to the SD card. Then import from the SD card onto the new phone.
However, If you want to use gmail as an extra backup option, I would log out of your gmail account on the phone and log back in. If you haven't logged out in forever or been forced to enter the security key it maybe has not sync-ed in some time.
Also you can try using the force sync button in Settings -> Accounts & Sync -> Manage accounts -> the little grey circle with two rotating arrows
You can also go into people and make sure that all contacts are listed to the linked phone book. When you enter new contacts it allows you to choose if they are phone only or linked to other locations - like google.
Go into people and hit the little down arrow header seen in the picture below. (it is rather hidden and easy to miss).
There should be a phone list and a linked list or something like that. By default it usually show All.
Also if you look on each contacts vCard in the upper right hand corner there is a little chain link pictogram that depicts whether it is linked anywhere or not.
You can click there and it will show you specifically if it is linked anywhere.
I'm not sure on the exact process, and 'People' might look different on the Hero, but I hope I am pointing you in a direction that will help you out.
(thanks htcevo3dtips.com for the pictures. Googled 'htc people' and borrowed them for our purposes)