Outlook Express is primarily an email client and newsgroup reader. It is the default email client supplied with Windows and comes free with Windows. It has all the basic facilities you expect from an email client - multiple identities, creation of folders to categories stored emails, and automated log-in and log-out. But it is just an email client.
Outlook is a full-blown contact management system. It enables you to store details on all your contacts, and to easily search and retrieve this data. It is NOT free with Windows, it is purchased as part of the Microsoft Office suite of programs. It uses the basic Outlook Express email engine as a part of its functionality. Overall it is much more powerful than the Express version. It is the sort of program a company would use to track its business contacts and their details for example. The average home user on the other hand is only likely to need to use Outlook Express, as the extra features in Outlook are all business orientated. A home user is notliekly to categories their friends for example, but a business will categories their contacts. Outlook will store electronic business cards, while Express cannot.
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