Outlook Contacts and Address Book - what's the difference?

Hello:

What is the difference between Outlook 2007's Contacts and the Address Book?  When I send an e-mail to someone, does their "nickname" (user-friendly name) and e-mail address automatically go into both Contacts and Address Book?  How can I be sure?  Which is better to use, Contacts or Address Book?

Also, when I search for a name in the Search Box, will the search automatically scan both Contacts and Address Book?  How can I be sure I am performing effective searchs for names, addresses and text body of people I have sent e-mail?

As you can see, I am a beginner to Outlook.  I am, however, very good with computers in general.

Thank you in advance.