If you single click the blank square at the top does it turn the edges blue? Then double click it and select choose from the menu and select the picture. It seems to be working fine for me at least.
Did you click the "edit" button at the bottom before you did all of this? When you do it should also turn blue, then you can edit the info... might be a stupid point but... 🙂
When you do it should change the format of the information of the people, and add plus's and minus's to some things.
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Otherwise, your Address Book works differently from mine, which would be strange. :P
I can't get it to work either, I click edit and then clicking or double clicking the empty picture frame doesn't do anything. This is a contact list from my Exchange Server and not contacts on the local computer. I think it is a bug, hope there is a fix soon.
I click edit. When I either double click the photo square or drag in a photo, nothing happens. Furthermore, when I click Card > Choose Custom Image... nothing happens.
To me it looks like it is depending on the address book, if it is the local one or from an Exchange account. I can add pictures to my local contacts, but I cannot add pictures to the contacts in my Exchange account.