Hi
This is standard behaviour, see this Microsoft article:
http://support.microsoft.com/?id=834743
You will need to create or modify the EnableFreedocs DWORD value on both your front-end and back-end systems to enable access to these types of documents.
As for GAL access in OWA, what do you see when you open the Address List window in OWA, did you enter a search query? The GAL in OWA is different from the GAL in the full Outlook client, you actually need to type in a search term and click Find. If you want to see all entrys press the space button then Find.
The good news is that OWA in Exchange 2007 will display all entrys in the GAL without having to enter a search term, and will actually filter its results in real time as you type your search term in, just like the full Outlook client currently does.
Regards
Ben Hoffman
Microsoft MVP - Windows Server System Exchange