I have an iPhone 4 that syncs fine with Outlook 2010 via iTunes (though iTunes is a horrible piece of software). I think the same procedure applies to iPhone 3. This is how I got it to work:
- Go into iTunes
- Click on your phone in the list on the left
- Click on the Info menu at the top
- Make sure the option to "Sync Calendars with Outlook" option is checked.
- For safety, I would also go to the option further down that page to "Replace information on this iPhone" and check all the boxes that apply; otherwise there is a risk of either wiping data from Outlook or ending up with a load of duplicates. Furthermore, all-day recurring appointments are not handled well by iOS and you can end up with all of these in Outlook being replaced with appointments that start and finish at 11 pm . Forcing the phone to only accept data should avoid this. Once this is done and all looks OK future syncs can be done without having to overwrite in this way.
- Hit the "Apply" button and it should work
Let us know how you get on