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Help Help! n00b's 'People' just stays on 'Loading...'

Hi all. Long time lurker (actually... long time googler that keeps pointing me here) ;) So... thx for all of your advice thus far.

OK... I have a Desire, branded to Telstra (Aust) with 2.1 that I run on Voda/Three (well, Three actually). I'm not against rooting, but it scares the buhjeezus outta me. I was gonna wait until my warranty was up.

Anyway...

The other day, my 'People' section just stopped working. It stays there, spinning around on 'Loading...' and gets nowhere. This also means that my SMS and even my Phone functionality doesn't work, because they must tap into the People database to operate. I can receive, I just can't send.

I got a new SIM from Three. Activated that. No joy.

So... any suggestions? Just take it back? I only have the stock SD card, so I'm grabbing a larger one so I can back everything up. Is there a factory reset? Or do I [gulp] root it? 2.2 would be nice... and it would be great to get rid of the Telstra bloatware they install on it (which I can't remove).
 

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