Finally think I got a system that works. This is for mac users with a Droid phone.
I use Intermedia as my hosted exchange service. About $40 a month.
I use Entourage Web Edition. This is a free update for 2008 users which now supports syncing of categories.
I use Touchdown Exchange by Nitrodesk as the Droid app that runs an Outlook/Entourage on my phone.
I have a Macbook for the road and a iMac as my office computer.
The phone, desktop, and laptop are all syncing with the exchange server. Intermedia has great tech support.