I had this problem on my insurance replacement. I called sprint, ended up eventually at the Palm Support department. They told me to go to the corp store, but I couldn't get there until later the next day. by that time, it was too late because it had automatically backed up my empty contact list...but I didn't realize that till later. The corp store tried activating my old pre, and trying to turn both on to "transfer" the contacts from the old pre to the new one. Obviously, this is impossible since you can't "login" to both phones using your Palm Profile.
They gave me the number for Palm Retail Pre Support. They told me to update to the latest WebOS then do a partial erase. No go. Said all my contacts were lost and were very appologetic. I ended up calling sprint back and seeing what I could get for some type of reimbursement. got a $50 credit from account services supervisor. I think during this whole ordeal I had to explain how the Pre stores it's contacts "in the cloud" and you can't just transfer contacts to another Pre via bluetooth/usb/wifi/sprint store/etc. They all claimed to have a Pre (talked to like 7 different people on the phone between Palm Corporate/Engineering and Sprint), but no one seemed to have an understanding about the Palm Profile and how it works! LOL
But, luckily, I had been reading on here about how to backup txt messages since I knew they aren't backed up to the Palm Profile. I had copied the PalmDatabase.db3 to my laptop using novaterm. Well, guess what happened next when I copied it back to the new phone? bam! all my contacts were there.
I guess I lucked out...don't recall that that file had the contact list too....I guess Karma was on my side for being nice with every rep I talked to about a credit.
I've setup the backup to go to google now instead as recommended by Palm Engineering themselves! lol even they don't have confidence in their own technology. :P