Version:           1.2 (using KDE 3.5.2 Level "a" , SUSE 10.0 UNSUPPORTED)
Compiler:          Target: i586-suse-linux
OS:                Linux (i686) release 2.6.13-15.8-default

Even if a friends email is in your addressbook, Kontact/Kmail will still prompt you to add the friends email into your addressbook if you are sending an encrypted email to somebody. 

It seems that Kontact/Kmail is looking up by name rather than the email address in order to prompt the user to add it in. Since it can't find it. It prompts you to add it into your addressbook.

How to duplicate the problem:

1. Add a friends email into your addressbook.
2. Import your public keys for that friend, and attach that to your friends entry.
3. Create a new email to your friend, click on the icon for encryption.
4. Click Send.
5. Kmail will prompt you to add your friends email address into the addressbook like you never added it at all to begin with. This creates duplicate entries for addressbook entries.