Having problems alphabetizing your address book by last name?
 
Go to Tools, E-mail accounts, View or change existing directories or address books, Outlook Address Book, Change, to set your sort order.  (In Outlook 2007, you’ll go to Tools, Account settings, Address Books tab. Select the Outlook address book and click Change.)
 
Note that your only options are to sort by "First, Last" or by "File As." So if you want your Outlook Address Book to sort by "Last, First" you must have your Contacts' File As fields configured that way.