I have created new contacts, I am able to see them in the GAL when using outlook 2003 but when i use outlook 2007 i can only see the contacts under "All contacts" Any reason why?

The most obvious thing might be that Outlook 2003 is not in local cache mode and Outlook 2007 is in local cache mode. If that is the case, you will have to wait possibly24+ before new contacts are generated and download to the offline address book.