This error usually means that your “Default Global Address List” somehow got disconnected from your “Offline Address Lists” object in Exchange System Manager.

To Resolve:

Method 1
Use this method to resolve this problem when you view Properties in the Address lists setting in Exchange System Manager.

Exchange 2003
In Exchange System Manager, expand the Recipients container.
Click the Offline Address Lists container.
In the right pane, right-click the offline address list object, and then click Properties.
On the General tab, verify that a valid address list is populated under Address lists. If a valid address list is not populated under Address lists, you must add one.

Note The default address is the global address list.
Click OK.
Right-click the offline address list object again, and then click Set as New Default if the offline address list object is not set.
If you made any changes, right-click the offline address list object again, and then click Rebuild.

Exchange 2007
In the Exchange Management Console, expand Server Configuration, and then click Mailbox.
In the Database Management window, right-click Properties on the mailbox store.
Click the Client Settings tab, click Browse, and then click the appropriate offline address book.
Click OK two times.

Method 2
Use this method to resolve this problem when you view Properties in the Offline address list setting in Exchange System Manager.

Exchange 2003
In Exchange System Manager, click Properties for the mailbox store, and then verify that the offline address list is populated with a valid offline address list object in Offline address list on the General tab.

Note If the offline address list is not populated with a valid offline address list object, click Browse to select a valid offline address list object.
Send an e-mail message from Outlook 2003.

Note In Outlook 2003, you may have to log off and log on again for a valid test.

This was taken directly from MS Support:
http://support.microsoft.com/kb/905813