SharePoint 2010 and Outlook 2010 both provide sophisticated contact-management capabilities. By joining the two together you can get the best of both worlds.
This recipe works for:
SharePoint 2010 Foundation
SharePoint 2010 Standard Edition
SharePoint 2010 Enterprise Edition
Office 365 (SharePoint Online)
You will need the Contribute permission level to edit contacts in Outlook 2010 and have those changes synchronized back to SharePoint. This normally means that you will be a member of the site member's group.
You will need the Reader permission level if you want to synchronize contacts (read-only) to Outlook 2010. You will be able to change the contacts but those changes will not be saved back to SharePoint 2010.
You will need Outlook 2010 installed on your client machine.