UPDATE:

With a little time on hand last night, I removed my previous Handspring Desktop software from my Windows PC, uninstalled the pro level version of Pocketmirror, and performed a fresh install of the Palm Desktop 4.1.

Then, since I'm using the latest 2007HE on my 770, I installed the 800 version of Garnet. No dice.

Uninstalled Garnet, installed the 770 version and I was able to sync my Outlook address book. (Update 12/20/07: Hmm, after refreshing my OS2007HE, I installed the n800 version and it worked. So much for my earlier theory)

It appears that the pro version of Pocketmirror was creating a problem for me.

So the magic combo (at least for me) is: if you're syncing to Outlook, use the standrd Pocketmirror that installs with Palm Desktop and if you're using a 770 (regardless of OS version) install the 770 Garnet.

Hope this helps others.