Outlook display is configured independent from Treo settings. Need to choose the correct headers/settings/etc in Outlook for the display you want (too many Outlook View options to give a single "fix" answer).
As for the inane treatment of Contacts vs Address Book ... (depending on the version of Outlook ... this may or may not be identical) right click Contacts folder select Properties / Outlook Address Book Tab. Ensure the "Show this Folder as an email address book" is checked.
When you go to Address Book (I try to ignore it ...

) you may need to change the "Show names from..." drop down.