It appears that the Contacts app doesn't allow entry of the common phone number formatting characters (e.g. parentheses and spaces for area codes) when editing phone # fields. However the sync software (PC Suite) transfers phone #s in their formatted form, and the Contacts app displays them in the formatted form. (I sync from Outlook where the numbers are all formatted.)
This problem causes a further problem - it's not possible to copy and paste phone #s into phone number fields if they're formatted. Quite often I'll select a phone number from a text, email or document and want to paste that # into a contact's phone # field. But paste is disabled if the clipboard contains a formatted phone #.
My preference is for the phone software to be able to allow entry of formatted #s (so much easier to read). The phone already has the ability to strip formatting when it matches the # of an incoming call to a contact. (Doesn't work in the SMS Report though, if #s are formatted!!!)