Its not possible to synchronize Outlook contact pictures with Microsoft Dynamics CRM 2011 however, after CRM 2013(Orion) release you can upload pictures in CRM 2013 for Contacts, Account, Leads and Users but again pictures from CRM 2013 of contacts will not get synchronized with outlook. CRM 2013 is still in beta phase so any information is subject to change until there is an official release.
Regards,
Satish Tiwari
Support Engineer
Microsoft Dynamics CRM