At some point it will ask you what you want to do with the contacts on your phone. I can't remember the exact question. But the result will be either to add your local contacts to gmail or not. Now if these contacts already exists in gmail you will end up with lots of duplicates. Which could be a problem, comes down to how many contacts you have in total I suppose. Merging entries in the gmail contacts webapp is quite easy.
@Chainbreaker - On the iPhone add your google account but do it as an 'Exchange' account. Actually just follow these instructions.
http://support.google.com/mail/bin/answer.py?hl=en&answer=138740
At some point it will ask you what you want to do with the contacts on your phone. I can't remember the exact question. But the result will be either to add your local contacts to gmail or not. Now if these contacts already exists in gmail you will end up with lots of duplicates. Which could be a problem, comes down to how many contacts you have in total I suppose. Merging entries in the gmail contacts webapp is quite easy.