If you send very much email, you'll use an address book to store names and email addresses, unless you have everyone's email address committed to memory or only reply to emails you receive and never send new mail. If you're like most people, you have a large number of people you send email to and a short memory, so you need to use an address book.
Your default Contacts folder is enabled as an address book by default when you first set up your Outlook profile. However, Outlook supports several address list sources you can use when addressing email:
Personal Address Book (PAB)
Lightweight Directory Access Protocol (LDAP)
Global Address List (GAL) and Offline Address Book (OAB), when you're using an Exchange ...