Can you check that the Outlook Address Book service is installed in your profile? Go to the File tab, then Account Settings and choose Account Settings, click the Address Books tab and check that Outlook Address Book is listed. If not click New and choose Additional Address Books and select Outlook Address Book. If the service IS listed, then the box should not be greyed out, but it may have corrupted.

Can you confirm the type of email account you are running, e.g. IMAP, POP etc and then take a screen shot of each of the areas discussed, paste them into a Word document and upload it here so I can take a look.