From Outlooks help file:

Outlook Address Book/Contacts

The Outlook Address Book is created automatically and contains the contacts in your Contacts folder, which it displays in the Address Book dialog box when you click Contacts in the Show names from the list. Use the Contacts folder to store and retrieve all types of information about others, such as street addresses, phone numbers, e-mail addresses, fax numbers, and Web page addresses. When you update your contacts, the Outlook Address Book is updated as well. It is recommended that you convert your Personal Address Book to Outlook contacts, because contacts support distribution lists, display (friendly) names, aliases, and all the other features that Personal Address Books support. Outlook contacts are also fully integrated into Outlook, providing flexibility and customization that is not available in the Personal Address Book. For example, you can associate birthdays, several types of phone numbers, anniversaries, and other custom information with your contacts. You can also sort, filter, and view your contacts in customized ways; for example, by last name first, or by some attribute, such as postal code. And of course, you can also print your view using the customizable printing provided by Outlook. The Outlook Address Book is available offline.