I'm sure most Dynamics AX admins/developers are aware of this but I decided to post it anyway. I didn't know how to fix this error when I encountered it during an attempted upgrade to 4.0 SP1 and also one of the Dynamics AX Technical contractors I worked with on setting up Dynamics AX back in August 2006 also didn't know how to fix the problem and he had worked with Dynamics AX since 2.5 was released.
If you encounter Synchronization errors, view the Application Event Log to determine what caused the error. In my case, there were two tables that contained duplicate data in key fields within multiple records. Because this data was part of the DMO company and there were no other records that were part of any company in use, I simply deleted the tables and re-synchronized. If your records are part of live data, I would advise attempting to correct the anomolies within the database and re-synchronizing.
Hope this helps!