Google Contacts, though you might not think it as a separate Google Service, but if you have a closer look at this application (in my words), you will start appreciating its usefulness. Almost all other Google Services have access to your Contacts, be it GMail, Gtalk, Google Docs, Google Calender, Blogger and so on.
And the features that Google Contacts has, makes itself a one of the best Contact/Phone Book Application I have seen. Microsoft Outlook's address book is quite advanced and very user friendly. Google Contacts is in no way less than any of the available Phone-book applications. And the best part is its integration with so many other Google Services.
Have a look at the screenshots.
Can you think of a single field that is missing out. Multiple mail ids, multiple phone numbers, multiple addresses, Title, Company, Notes, IMs, even a photo!!!!....What more do you want? Almost all the fields that are there in an Outlook contact, Google Contacts has them all. Well, I forgot to mention one very small but important thing. There is one more field, which I should probably say as the "Status" which shows the current status of the contact on Gtalk.
You can also create groups and then assign each contact to a group. And when you create a group, with some contacts in it, you can see an entry in the pop-up list when you type in something in the "To" field while composing a mail in GMail. Now, in one go, you can send a mail to many people just by mentioning the group name. Isn't this similar with Microsoft Outlook's Distribution Lists?
I am sure you must have seen Outlook's brilliant Calender. Please also have a look at Google Calender. With Gmail, Google Contacts and Google Calender combined, isn't it very similar to Microsoft's Outlook. The only difference is that Microsoft provides all these three, packaged in a single application. While Google has separated all these into different applications but within comfortable reach of each other, and for a good reason as well.
So much has been spoken already about GMail and to some extent about the Google Calender. But the least popularized or publicized Google Application according to me is the "Google Contacts". Keeping the Contacts as a completely separate application, Google has been able to integrate the same with other services. Now with the launch of Google Android platform, I won't be surprised if they re-use the same Google Contacts and synchronize the phone's phone-book with Google Contacts. Google contacts definitely serves as one of the foundations for all the Google Services. And with the Google Contacts API, you can design your own application to have full control over your contacts.