Synced items generated in 2007 have changed and /or not synced categories/colors

Just purchased and loaded 365 onto a new high spec machine , after a little confusion with registration /user registration etc it is working , some of it looks nice and familiar - word is opening old word files and templates cleanly and looks quite user
friendly
Outlook is presenting challenges , I use a windows phone so set up a live.com acct. some while ago to sync contacts and calendar entries ( I also have my own company domain ,accounts have been successfully set up for that)it has all work ed ok until swapping
to 365 the live act is syncing content but is doing odd things with the categories it is showing the category options with all the names I assigned them - clients ,suppliers technical etc etc
two problems
1 it has changed the colours of all the categories - even leaving some of the previously used colors unused
2 in contacts (now called people ) it has failed to sync the categories for entries although it has brought the names of categories across in the "categorize " option - again with all the colors swapped around
Hoping someone has an answer for this - I do not fancy going through a 1000 or so entries re categorizing them!! :-)
If it helps I have not changed from 2007 on my old laptop - would like to get new system running right before cutting all lifelines!

How do you setup your live account in Office 365? Try to use the Exchange ActiveSync protocal to setup live account in your email profile and then re-sync it.
File > Account settings > New > Manual setup or additinal server types > Outlook.com or Exchange AcitiveSync compatible service
The mail server: m.hotmail.com
For the categorize color, please check if the MCL is correct in your profile, the following link may also help you:
http://www.slipstick.com/outlook/outlook-categories-and-color-categories/
Tony Chen
TechNet Community Support

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