When you address an email by using the Address Book can you see the Contacts
if not make sure the Contact folder is enabled as an email address book by
right clicking the Contact folder selecting Properties then Outlook Address
Book, if that doesn't work or is already enabled then you may have to remove
or readd the Outlook Address Book service to Tools || Email Accounts ||
Change or view existing directories or address books || if the Outlook
Address Book is present then remove and readd, if not present then Add.