Google just announced a beta version of Google Sync that will let you sync over the air your Gmail Contacts and Google Calendar with your iPhone. Google Sync uses Microsoft Exchange ActiveSync to allow updates (except Gmail) to be pushed between your Google account and your iPhone.

Instructions on setting up can be found on the Google Support page but do take note on a few points. As it is still beta, it is best that all data on the iPhone is fully backed up and your Mac’s AddressBook and iCal are updated.

Some additional points:

• Requires firmware 2.2 on both iPhone and iPod Touch
• If you already using another Exchange ActiveSync account with your iPhone, you can’t use Google Sync as the iPhone only supports one ActiveSync profile
• Gmail Contacts and Google Calendar must be updated before initiating the first sync as data on your iPhone will be deleted during setup
• Google Sync currently can support up to 5 calendars – read here on setting up the calendars to be synced
• Once you use Google Sync, you will not be able to sync your Calendar and Contacts on your iPhone via iTunes although you can use iTunes to update Gmail Contacts
• Google Sync is also available for those that has their own domains that uses Google Apps
• Not sure whether it will have any conflict with syncing via MobileMe concurrently with Google Sync. If you have both running side by side, do let us know
• Go to Google Mobile Help Forum for more information, problems listing and tips with using Google Sync

Watch a video introduction from Google about Google Sync: