Address Book isn't necessarily great, but you're right: it absolutely doesn't suck. Combined with its Mail/iChat integration, it makes for a pretty awesome communications suite.
That said, there's still almost certainly room for improvement. Contacts are still seen as a task rather than a pleasure.
Your comment about 'task rather than pleasure' reminds me of the story about TapBot's new iPhone unit conversion app. [1]
They took an idea that had been done and re-done ad nauseam, but focused on the enjoyment of the process rather than simple efficiency. I like the way the developer describes it:
"Our goal was to make unit conversions fun and enjoyable. I wanted to separate the conversion steps into little tasks that need to be completed. It gives a sense of satisfaction when you’ve completed a unit selection sequence or shock if you press the wrong button, almost like a game. Regardless of whether the feedback is positive or negative, it brings out emotion in the user and that was my goal. Once you get used to it, there’s a sense of satisfaction and rhythm to the process. It’s very subliminal, but it’s there."
That said, there's still almost certainly room for improvement. Contacts are still seen as a task rather than a pleasure.