This is for those that keep a backup of their contacts on their SIM card.
Download advanced config from here
http://www.freewarepocketpc.net/ppc-download-advanced-configuration-tool.htmland .net compact framework 3.5 from here
http://www.microsoft.com/downloads/details.aspx?FamilyID=E3821449-3C6B-42F1-9FD9-0041345B3385&displaylang=enInstall both and open advanced config, open the phone settings, under show sim contacts it should say no(default), change it to yes and soft reset, open it again and this time change it back to no and soft reset.
Now you should no longer see your sim contacts.
Note: This only works with the WM contacts UI. It will not work with the LG Contacts UI.
