This policy setting allows you to turn off the fast people search feature (powered by Office Communicator) in the Outlook ...

This policy setting allows you to turn off the fast people search feature (powered by Office Communicator) in the Outlook "find a contact" box.

If you enable this policy setting, Outlook fast people search will be turned off, and the "find a contact" box will behave as if Office Communicator is not running.

If you disable or do not configure this policy setting, then the "find a contact" box is powered by Office Communicator.  Users will get a word-wheel experience and search results will come from Office Communicator.