Amazingly, information on how to sync public contacts on an Exchange server with contacts in Salesforce is nowhere to be found on the Web or within Salesforce's own help system or forums. Thanks to the persistence of Leslie in my office, here's how to do it--works great.
Subject: 01284901 Can we sync to a public folder on our server with outlook
Thank you for logging a case with the Salesforce.com Support Team.
In order to synchronize to Public Folders using Outlook Edition 2, you must modify a registry key which contains the instructions.
In order to modify this registry key, you must be logged in as an Administrator on your computer.
The name of the registry key is located in the HKEY_CURRENT_USER\Software
The SupportPublicFolders value is of type string and it can contain either true or false.
By default, this SupportPublicFolders string value is not present, and therefore the value is assumed to be false. In order to support the synchronization to Public Folders, you must change the value to true.
Note that accessing public folders may degrade the performance of the Outlook Editon 2.0 "Salesforce Options dialog" if there are many folders or the Exchange server is slow.
For further information, please see the Release Notes attached.
Feel free to contact me back should you have further questions regarding this case.