You can use Outlook’s New->Folder menu option to create a folder that contains calendar, contact, journal, note, task, or mail items. These items in any newly created folder are stored on the mail server.
The items in the default Journal and Notes folders are stored on the mail server. The items in the default Calendar, Tasks, and Contacts folders are stored in the calendar server (Calendar and Tasks) and address book server (Contacts). Any subfolder under these default Calendar, Tasks, and Contacts are locally stored.
This feature allows you to create a new Contacts folder that is stored on the mail server, for example, and share it with another user. However, if another user has created a new shared Contacts folder and you subscribe to it, or if you log onto Outlook using a different machine, all folders stored on the mail server are assumed to be mail folders unless you change the folder class to correct this.