That is the Synchronise icon.
Are your contacts sync'd from Gmails contacts?
goto settings > accounts & Sync > click on your Gmail address to sync the account. (must be connected to 3g or WiFi)
Thank you for you post and it is great to see you here.
I see there has been some excellent support from thesoupdragon, please can you advise us if this has worked for you.
If you have any further queries please do not hesitate to post.