Outlook contacts as read-only

Check you permission on the public folder.. ensure you have edit permission.

you can get there by right clicking on the folder and goto properties.  Then the permission tab.  You most likely have "create items permission"  But dont have edit items permission.

On the exchange server, by right clicking on the public folders and then clicking on the "security" tab (there's no permission tab) all the "allow" check boxes are checked already. I tried unchecking and checking them again but the contacts are still read-only. Any other solution?
Thanks.

Just do it through your outlook client..

There is no "permission" tab in there either. The closest thing that I see thats simular to what you're describing is in the "summary" tab. It shows "your permissions" then there's a field "permission" which is filled in "Author" (but cannot be edited) and everything else is grayed out.

I'm using exchange 2003 - if that may help.

Yes, under author permission you can only edit items you own.. You should own the contact since you put it there.. Can you creat a new public folder for contact items, make sure you permission is owner, and copy the item to the new folder to test.  You can delete the folder later, but this is a good way to test the permissions issue.  

Are you using your user account?  Do you have an administrator account that can be used to change folder permission?

How do I create a nee Public Folder?

How do I create a new Public Folder? I want to make sure that its done correctly.

you can do this through outlook, brows to public folders, find a parant folder in which you want to creat a new public right click new folder.  You must specify Contact items.. by default it will be mail items.  Give it a name etc.. when the page specifying permissions comes up, make sure you give All permissions to your account.

correction.. the permission page wont automatically come up.. but by default, you will be the owner.
but you do have to give it a name, and specify the type (change from mail and post items, to contact items.)

How do I set the permissions to allow everyone else (all other exchange users) too?

the same as folder permission, you can add individuals, or groups.  The objects you wish to add must be mail enabled otherwise outlook will not see them .  You can mail enable a group through Active directory users and computers.. By right clicking the item, then goto exchange tasks establish email address on groups.  This also works for distribution groups as well.  

If when you are trying to add a group, if you dont see the group in the list, its because they are not mail enabled.

oops.. through the permissions tab..  You can also specify what level of permission they get.. Like read only or folder visable.

Personally I dont like .pst files, mainly because they are not searchable, and when employees leave the company, its difficult to track the .pst, and prevent its theft.  So, They've been disabled.
I have a users folder in the public folder store, each user has a folder based on their name, just like their personal folder.  Each user can only see their own folder.  WHen a user leaves the company, I dont have to hunt down .pst files for business continuity.  Its already there, backed up and ready to go.

Sorry to get "off track" on that last one.. I was just demonstrating a use for public folders.  I use it to augment the information store, for email archiving.  The permissions tab allows me to specify who see's what.