I have this problem.
One user shares (view only) a contact lists with many other users.
If the first user changes "Display As" name of a contact, users with Outlook 2007 won't see the new "Display As" name, but the old one. I don't know how to update it.
Users with Outlook 2003/2010 don't have this problem.
The only way to solve this problem is to re-create the Outlook profile but it isn't so nice...