***Solved*** - I can't find the "edit button" to edit the original thread - but the Custom Alerts works a bit wierd.
If the phone number has a - in it, it will ignore the contact alerts and play the normal sound.
If there is no parentheses in the phone number isn't there, it gets recognized as a BBM, and plays that message alert.
So for contact alerts (non ring tone, just message), the phone number should look like this
(123) 4567890 <--Custom Alert works
(123) 456-7890 <--Plays default profile alert
1234567890 <--Plays BBM Alert
Hope this helps some people out, I know I was going a little nutty for a while.