Setting up the way your contacts are filed.

Use the Tools > Options > Contact Options dialog to set up your contact folder.  There are only two significant settings, 1) how to display names, and 2) how to file names.

Creating a vCard.

Though useful as a means of distributing your contact information, a vCard is not created in the contacts area of Outlook.  It is created in the Signatures area.  Here's how:

1. Tools > Options > click the Mail Format tab

2. Click the Signatures... button

3. Click the New... button 

4. Give the signature a title, be sure "Start with a blank signature is selected, and click the Next... button.

5. Create a signature and select your contact information under "Attach this business card (vCard) to this signature:

6. 

7. Click Finish.

Each time you use this signature file in an email your vCard will be attached.

Creating a contact from the To: field.

When you receive an email from someone you wish to add to your contacts list, simply right-click their email address in the header of the email and choose "Add to Outlook Contacts..." from the pop-up menu.

Creating a contact from one mailed to you

If someone attaches their contact information to an email (attached as an Outlook Item) simply drag and drop it on the Contacts button (or folder) to add them to your contacts.

Creating a new message to a contact.

To quickly start a new message to someone in your contacts list, go to the contacts list and right-click the title of the contact card for the desired person and select "New Message to Contact" from the pop-up menu.  Note that there are many other actions that can be initiated in the same manner.

Summarizing Activities with a contact.

One of the great features of Outlook is the Activities tab in the contacts folder for any individual (or entity) in your contacts list.  Open the contacts form for an individual and click the Activities tab.  Outlook thinks for a moment (you will see a little magnifying glass icon circling on the upper right of the form if you look carefully) and then responds by listing all activities with that contact within Outlook from the time the contact was created.  Wow.

Creating a map to a contact's address. 

The little yellow road sign at the top of the contact form will create an MSN map to the address given on the form when you click it.

Sending a contact to someone else.

You can send your contact information to someone else as a vCard (see above) or simply attach it as an Outlook item to an email.  The item will be meaningful to other users of the Exchange server, the vCard is more universal and can be used by many email programs.

You may also be interested in this video lesson from Microsoft: Great Outlook features to organize your contacts.  Also interesting is:  Business Contact Manager: track customer data in Outlook.