I have the same problem...and I've tried the suggestions posted here, but over time, various contacts just duplicate themselves!!
I have noticed that some of the duplicates are because the person changed devices, and other times, just random duplication. With regards to the person who changed devices, it is my understanding that the person with the new device needs to send a message to his/her contacts (even something as simple as "hi"), and in the background it will update the PIN info.
Generally speaking this works "most" of the time, but there are times where I end up with two of the same contact.
I have not experienced the problem where I don't know who I'm chatting with....if I PIN the dead contact, the message wont deliver...but I've not experienced the crossing up of contacts