I'm not really sure but I think the names need to be in the personal address book or the global address book.
The personal address book takes precedence over the global address book. I used to call someone in the office Mrs T and it only appeared as that instead of her actual name.
xwb is correct. She needs to set the display name in her Contacts to just the name. By default it shows the name plus the e-mail address, she needs to change it to just the name.
Hope this helps.
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