I'm sure this bug applies to many other Nokia phones using the same software, but this is the only phone I've tested.
The Nokia 8260 identifies incoming callers and outgoing numbers first by looking up the number in your phonebook. So, if you have a number stored as "Spanky" in your directory, then if Spanky calls, or if you happen to call Spanky by dialing his number, it shows his name.
Unfortunately the software only compares the last seven digits of the number to decide who the contact is.
This manifests itself in two ways:
The 'correct' way to handle this would be to either know the local area code, or at least compare with more digits when they are available, dropping to a 7 digit compare only if needed.
Presumably this bug is a "feature" due to the fact that local area codes are unnecessary and people are more likely to dial a 7 digit version of a 10/11 digit number in the directory (or vice-versa) than they are to have two contacts with the same 10 digit number.
Even so, it can be confusing if you forget someone's area-code, or if you happen to have a number in multiple area-codes (such as a cell/home number, or a series of offices that snagged the same 7 digits in multiple locations). Or, if by strange change, you happen to have two friends in two area codes with the same 7 digits. I would guess that the odds are there is at least one person out there with a Nokia phone in this situation.
And I bet they're pissed.
(or at least confused)