A vCards is a small file that contains "business card" type information in an agreed format and as such provides a universal method for the exchange of this electronic information.  So rather than having to cut and paste, or worse still re-type, a sender's details into your contact directory, if they had sent you a vCard it could be automatically uploaded.

Within MS Outlook you can create a vCard for anyone in your Contact list but most importantly you will want to create one for yourself so to start with you need to create a new contact with all your own details.

You may  then create the vCard by either generating one from your contacts folder:

1) Open the Outlook Contacts folder.
2) Select or Double-click the Contact record you wish to use.
3) Select File, Export to vCard file.
4) Specify a name for the file in the File Name text box. You normally want to use the same name as the Contact record name, but you can use a more descriptive name if necessary so that you can more easily identify the vCard file.
5) Choose the Save button to save the file.
6) Select the Close button to close the Contact record.

or by creating one as you generate an autosignature:

1) On the MS Outlook Tools menu, click Options.
2) On the Mail Format tab, click Signature Picker.
3) Click New.
4) Select the options you want, and then click Next.
5) Under vCard Options, click New vCard from Contact.
6) Select the Contact or Contacts for whom you want to create a vCard and the click OK (unfortunately the new vCards don't immediately appear in the vCard Options drop-down list so you will have to revisit this dialog to pick up the vCard you have just created and add it to your signature)

You will find that the vCard (.vcf) files have been created in the directory:
    c:\winnt\profiles\<your name>\application data\microsoft\signatures\
or equivalent and so if you want to remove ones you're not using or rename them do so here.

Note that you probably won't want to automatically include a vCard with each new message as this will not only increase the size of your messages but will also to annoy message recipients who end up receiving multiple copies of the same vCard. You should therefore create separate signatures that contain your vCard file and use them only on the first response to a new contact.

To import a vCard into MS Outlook:
1) Double-click the vCard.
2) Type any additional information you want to include for the contact.
3) Click Save and Close . 

Tip You can also drag the vCard onto Contacts on the Outlook bar.

NB vCards are not created dynamically.  So if you change your contact details be certain to overwrite/replace the old vCard because if you don't you will continue to send out vCards with your old details.  Test this by double clicking on the vCard you've added to your latest e-mail to see what it contains.

In my view vCards are underused and provide a great way of saving time and avoiding transcription errors!