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Syncing seems to be working fine here -- no problems at all on 1.6 for my MacBook Pro and 1.2.1 for iPhone.

How many zipped transaction files are in your database? You can view this info by right-clicking on your database file and selecting "Show Package Contents". Or on the iPhone, tap the info button and scroll down.

As a point of comparison, I currently have 212 projects and 1821 actions stored in 7 zip files on my iPhone. Depending on how recently I've synced, it takes anywhere from about 1.5 seconds to 30 seconds to complete a sync on my iPhone via MobileMe over WiFi.