As mentioned above, you may want to delete all of your contacts from Gmail (through the web interface) and make sure that the phone syncs to to that Gmail account (effectively deleting the contacts from your phone).
Note that there are three types of contacts in Android.
1) "Google Contacts" which can sync with Gmail.
2) "Corporate Contacts" which can sync with Hotmail/Live Mail, or an Exchange Server.
3) "Facebook Contacts" which are synced with Facebook.
4) "Phone-only Contacts" which are stored only on your phone, and not synced with a server.
Many times people get duplicate contacts because they somehow (usually at the phone store) get their contacts transferred over as "phone-only" contacts, but then also end up with duplicate "Google Contacts" and/or "Corporate Contacts". To check the contact type, go to a contact, hit the settings button and select "Edit". In the editting screen the contact type will be listed.
If somehow you got "phone-only contacts" onto your phone, you'll have to delete them manually (or through a free program like MyPhoneExplorer) since phone-only contacts are not synced with the cloud.
If you rely on Outlook like I do, you should consider syncing your contacts and calendar using
this Hotmail-based method. It works great. It works automatically. It's free. It doesn't require you to use Hotmail for email. And it requires no app on your phone or third party software on your PC. This is what I use to sync contacts and calendar (though I use Gmail for email).
If you want to sync your Outlook contacts to Gmail (and then back to your phone from the cloud) you may want to consider using the open-source
Go Contacts Sync Mod. If you go to the Hotmail-method link above and skip to page 5, posts #235 & #246, you'll see a comparison of the pros and cons of the Hotmail method versus the Go Contacts Sync + Google Calendar Sync method.
Good luck!