Anyone who has participated in migrations or transitions to Exchange has most likely encountered or has had to work around potential issues caused by the nickname cache. A “cache,” also known by its file extension, NK2 in older Outlook clients, is a convenience feature in Outlook and Outlook WebApp (OWA) which lets users pick recipients from a list of frequently-used recipients. This list is displayed when the end user types in the first few letters.
The potential issue revolves around end users using those lists to send messages, as the list contains cached recipient information. Because this information is static, it may become invalid at some point. Thus, when users pick recipients when sending messages, they may be sending messages to non-existent recipients or invalid e-mail addresses, which create issues like non-delivery of e-mail.
In an earlier version of Outlook, this information was stored in local .NK2 files. In Outlook 2010 and up, this information is stored in your mailbox (AutoComplete Stream). Unfortunately, OWA utilizes its own cache mechanism while Outlook stores recipient information in other locations as well, like the ‘Suggested Contacts’ folder for example.