The list of contacts in Outlook appear in the order you entered them both when you look at the list of contacts and when you click to and get a list to choose from to put in the message you are editing.
You can sort the contacts by the different items you can enter when you add a contact. This includes name, email address, address, organization and a number of other items.
To sort the list click on contacts and the list of contacts will appear. Now move your mouse pointer to below the list or to the side of a contact in the white are and right-click. Then choose Sort from the short-cut menu. You will see a dropdown box by Sort Items by and clicking on teat arrow will reveal a number of choices. Choose the one you wish to sort by. If you want to sort within the sorted items, for instance major sort by last name and then sort the same last names by first name you will use the major item first and then in the next box called Then By you will choose the inner sort. Then click OK.
If you chose to sort by an item that was not showing when you look at the contact list you will get a message asking if you want to show that item. You probably do so you can tell they are in order.
Your contacts will now appear in the new order.
In Windows Live Mail you can only sort contacts by first or last name. Choose Contacts on the left and your list will appear. Click on the Home tab and then about midway across is a Sort By option and you can click on it and it will give option to sort by First or Last Name.
Thanks to Wade and Pat for the question.