In a day and age where people rely on their phones to remember massive amounts of information about thousands of acquaintances and friends, the thought of losing the contacts in your cellular phone is scary. Storing this information in multiple places is a necessity to avoid catastrophe, which is why there are so many ways to do so.
iTunes now has a feature that allows you to back up the settings and contacts from your iPhone. Plug the phone into your computer and open iTunes. Right-click the iPhone icon, then scroll down and select "Back Up." If your iPhone ever crashes, or you lose your contacts for any reasons, you can re-connect the phone to your computer and recover these settings and contacts by selecting "Restore from Backup."
Other alternatives to iTunes are found mostly online. Google is a superb resource for syncing your contact list to your Google account, which allows you to re-access and upload those contacts in case of a crash or loss. There is also an app (application) that is downloadable for an iPhone called iDrive Lite. This program allows you to backup your contact data on the Internet for later access, and it is completely free. Another, similar, web-based application is called MobileMe, which allows you to store your contact information online, and retrieve it whenever necessary, but this service costs $99 per year, with 20GB of storage provided. Some folks even use Facebook to backup.