I forgot to mention, I also tried clicking Tools--Email Accounts and
then selected "View or change existing directories or address books".
The only option in th window that comes up is the Outlook Address Book
(MAPI). I select it and click "Change" and for both of my Contact
folders I chose "Show names by" "Files As (Smith, John)".

This didn't solve my problem either.

I am not connected to any Exchange server or anything like that. I'm
just using Outlook to access my POP3 mail and keeps Contacts, Calendar
and Notes. I sync with a PocketPC, but I'm not syncing email.

If I forgot any pertinent information please let me know.

Regards,

Gary