OK, this is a weird one. Client said that just recently this started doing this. Only change was turning on Shipping.
In Sales Order Entry, if you choose a different Contact from the Confirm To field lookup, it brings in the contact CODE instead of the contact NAME. And if you create a new contact, it will work correctly the first time. Now I'm getting this from their IT guy, who I HIGHLY respect. But this just has me totally flabbergasted!