If you upgraded to Mountain Lion and Apple Mail no longer auto-completes email addresses when you create an email message, or fails to create calendar items from events or invitations in email you receive, then you've run up against an interesting bug in the Mail app.
Courtesy of Apple
Normally, when you start typing an email address in Mail, the app will try to guess the rest of the address, to save you a little typing. I really like this feature; just enter a letter or three of a recipient's name, and Mail will provide a list of possibilities to choose from. Chances are, if you've exchanged email with this individual (or company) before, then his, her, or its email address will appear in the suggestion list.
The auto-complete feature relies on your Address Book (now called Contacts in Mountain Lion) to create the list of suggested email addresses. The problem in Mountain Lion is that if you previously set up Address Book and Calendar to share data with a cloud-based storage system other than iCloud, there's a good chance that auto-complete, and the automatic addition of events and invites to Calendar, won't work in Mountain Lion.
The fix is pretty simple; you'll find complete step-by-step instructions in our What to Do When Mountain Lion Mail Fails to Auto-Complete Email Addresses guide.

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I have the same problem but this is a fresh install with no outside synch services involved at all and I do have the Address Book folder right there where it should be. Things worked fine for about two weeks. (I think it may have gone haywire after the last Java update but don’t hold me to it!)
Problem Solved. Mail has some symlinks buried down deep in the Library that point to these folders referenced in the article. Mine were damaged and had to be recreated. I found them in this curious spot …
/Users/Chris/Library/Containers/com.apple.mail/Data/Library/Application Support/
… where i recreated the symlinks for …
AddressBook
iCloud
SyncServices
… all of which point back as mentioned above to the originals found in …
/Users/Chris/Library/Application Support/
I figured this out after reading articles in Apple support with regards to why folks Mail app was crashing. There I learned about this Contents folder and how Mail uses it to locate things. Good luck!