First thing you need to make sure that the public folders has a contact list created. Also, double check the permissions so that your users can view the contact list.
1) To setup the Contact List in the Address Book navigate to your public folder and find the contact list you want to add.
2) Right-click on the Contacts Folder and click Properties.
3) Click on the Outlook Address Book tab.
4) Check the box next to “Show this folder as an email address book.”
If the check box is unavailable you need to add the Outlook Address Book to your profile.
1) Click on the Tools menu and then click on Email Accounts.
2) Click Add a new directory or address book, and then click next.
3) Click Add additional Address book, and then click next.
4) Click Outlook Address Book, and then click next.
5) Click OK and restart outlook.