Has anyone managed to get their contacts properly syncing between their iDevice and Outlook 2011 via iCloud?

When I turned on iCloud in Address Book, it created a second set of duplicate contacts. I now have 500 contacts instead of 250. When I view them by group, half are "On my Mac" contacts and half are "iCloud" contacts. Both groups are the same.

When I add a test contact to Outlook 2011, it syncs with Address Book and adds the test contact to the "on my Mac" group. But iCloud only syncs the "iCloud" group.

I checked the Address Book Preferences and iCloud is set as the default group. How do I get Outlook to put new contacts in the iCloud group? Or, how do I get iCloud to sync the "on my Mac" contacts?