I believe you have outlined the very reason I'm using Pidgin for IM instead of having all contacts neatly integrated with the phone contacts. I will only ever need my phone contacts when I try to make a phone call, and my previous experience from a WM6.0 mobile is that mixing the phone and IM contacts can make for a very long and international list of mostly people I'll never call.

Good contact sorting/filtering/presentation should sort the "long list of people I never call" problem. It could be as simple as a Symbian-style tabbed filter: "IM contacts", "Phone contacts" - a few people would come under both. Preferably filters for individual IM accounts and/or groups of people. Being able to be online for some people and not others would be great too. This gels naturally with similar ideas for filtering the call logs.

Now if only Pidgin supported Skype.

I do think integrated contacts are a good idea that can work, but it's too clunky at the moment. I haven't dared touch it for fear of losing business contacts on the servers, and, like you, I suspect the present version would become quickly unmanagable. It's already a bit painful just scrolling through phone contacts.

Yes there is. If you choose the option to delete all contacts from phone (not by manually selecting them). Inside the contacts menu, click on the title bar at the top. Then click on the settings option. In here there is an option to delete all contacts from device.

This will NOT remove the emails from the server, nor will it remove the ones that are merged (i.e. it will remove the part of the contact on the device, but it will leave the part on the server).

I did removed all my phone contacts by mistake when configuring mail for exchange. there was an option to delete contacts on phone when sync-ing, I thought that abour 'do not store contacts from the server on the phone' but that was about delete all contacts from the phone. weird, I got just what I had on my SIM and Skype... my wife and family numbers gone...) that was pretty funny. luck I remember wife number so that didn't affect the evening L... need to be really carefull with all that checkboxes etc

Did the, almost, same thing.
Added msn protocol and naturally it imported all my msn-contact to phone book.

I found it looked way too cluttered having both names and a bunch of email adresses in my contact list.
When deleting an msn-contact it showed the warning which some seems to not read, "will delete from server too, sure??"

So what I did was uninstall the msn (haze) protocol thinking that would rid all connections to my msn-contact and it would be impossible for n900 to delete my contacts from server.
After that I went ahead and deleted all msn-contacts from my phonebook (although it still gave the same warning message).
Smart huh?

Naah... Somehow it still removed all my msn-contacts from the server.
And as the thread starter and many more I have contacts from several years back, even though occasional contacts, still important contacts.

Intensely unsatisfying result.

I remembered that I had some time ago seen a list of contacts sorted in different categories under some preferences tab in aMSN.
So I installed, logged in -> preferences.
And there you go.
They were all there, just that now they weren't on my list anymore.
Seems they somehow are still stored as contacts on the server.
So I added them all back to my list and yes indeed, they are all back.

Happy ending (TM)