I was having the same problem. I was not looking in the iClouds contact folder.
In Outlook I would always go to default contacts and it was empty (I have a fresh install of Outlook). I was frustrated because I was expecting the contacts to be updated with all my iCloud info. Nothing ever happened. I got to looking around and noticed on the left Outlook pane under Contacts header there was an iCloud bar that I had not noticed. It is under My Contacts. I expanded this bar and there they were, all my iCloud contacts organized just like I expected.
I did a test and updated an address on my iPhone 4S and within 15 seconds the Outlook version was updated.
The iCloud calendar was a similar "fix" for me.
So, when I first read your post I was experiencing the same thing as you and was dissappointed because there were no responses. Turns out it was working, I was just not looking in the right place.
Hope this helps you.