I had the exact same problem after importing contacts created on a different computer into my Outlook 2007 ie, Contacts were fine but Address book was completely empty. I can up with a simple solution by trial & error:
1. Renamed all my Contact folders by adding a 2 to the name
2. Created all new folders with the original names
3. Dragged all contacts from the corresponding old folder (with the 2) into the new folder.

Now all the entries showed up in the Address book. There is a linkage between the Contacts and the Address book and somehow that can get broken. The above procedure magically restored the linkage. Hope that helps.
Pete