Contacts sync query

It seems as if no sooner than I resolve one issue, another query arises.

This time I have a few queries about Outlook/Outlook.com contacts.

In Outlook 2013 on the desktop I have 2 sets of contacts listed - most, but not all, contacts are on both lists. Under 'View Source' it shows:

Outlook (Contacts, Personal Folders) and/or

Outlook (Contacts, 'my Microsoft Account ID')

For some contacts, but not all, that appear in both lists not all of the information is either present or consistent.

If a contact image exists then it exists for both lists BUT is not displayed for them in People at Outlook.com.

Unfortunately I cannot check what my Windows Phone 8 is displaying as it is away for repair but as that relies on outlook.com to sync, I have no reason to believe that it too is inconsistent.

So, my question/s is/are simple -

Do I need to have two separate contacts lists in Outlook?

If both lists are either needed or desirable, how can I make sure they are consistent across the two?

How can I consolidate into a single list?

Why are contacts images not uploaded? Do they need to be a specific size (in which case why is there no warning dialog if the image is not compliant?)

Thanks again.