This is a known issue with Android 2.0+, you can track it here:
http://code.google.com/p/android-smspopup/issues/detail?id=74
This is because Android 2.0+ can sync contacts from multiple sources
and stores the unique contact identifier in a different way.
Theoretically as long as there are no big changes in your contact
lists (by adding/removing/updating new accounts in bulk), if you clear
your custom contact notifications and re-add it should work again.
However any large changes in contact list may cause problems again.
Adam