It DOES work
First thing to know is that Windows Mail (and Live Mail) no longer uses the Address Book - instead contacts are stored in the "Contacts" folder as individual 2contact" files. The point of this is to make it easier to access and import / export from other programs. "Contact" files are more universally accessible than the restricted format of the old address book
The contacts can be found from the main Windiows Mail screen by clicking tools > contacts
To make the program autocomplete addresses as you type, then click
tools>options>send>automatically complete e-mail addresses when composing
And I don't know who dreamt up the 27 address limit - thats totally wrong. You can have as many contact files in the "contacts" folder as you like.
The actual storage location is c: \users\user name\contact\*.contact