Ever since hotmail became Outlook.com my contacts/people are all messed up. What happened?

I went into "people" deleted all my contacts to start over. I even waited 35 days before re-entering them all back in manually. Thought that would be good enough. NO, not that easy (of course not--- this is Microsoft). So now when I select the big blue "Outlook" button and open a "new" email then press "To" the address book pops up and all my old contacts are still there, as well as all the new ones that I just re-entered. The address book is now twice the size as before. When I press the big orange "people" button to edit/manage my contacts all I see are the newly re-entered contacts. What's up with that?

By the way changing the name from contacts to people is kind of stupid.

All my people are contacts but NOT all my contacts are people. DUH!

Yes I tried deleting the cache, resetting IE8, upgrading IE8, all the usual suspects.