OS 10.5 - Grouping contacts in Address Book like iPhone or iPod Touch automatically???

How come the iPhone and the iPod Touch group the contacts under headers by the first letter last (or first) name, but OS X's Address Book doesn't? It seems like a fairly simple feature to add into Address Book; it's already part of the iPhone and iPod Touch address book feature?

Example of what I'm looking for:
A------------------
Bob Archer
Jena Aszick
B------------------
Mike Bobster
Jane Brymour

Instead, Address Book just lists a huge list of names:
Bob Archer
Jena Aszick
Mike Bobster
Jane Brymour

I've resorted to making Smart Groups for each letter by last name. Not only was making each of these groups arduous, but it shouldn't be necessary.

How did I make these Smart Groups, in case you are wondering? Well, here's how, and you'll see why they were annoying to make!

1. In the New Smart Group dialogue box, type A for the name of first smart group.
[list=2]In the drop down that says Card, go all the way to the bottom and in the Other submenu, choose Last. Why in the world is First/Last name in a sub menu and Name is in the main menu? Who has a bunch of friends named "Nick" and wants to make a Smart Group for them??? Common Apple![list][list=3]In the drop down that says Contains, choose Is[list][list=4]In the fill-in field, type A*[list]

The * (asterisk) forces Address Book to populate everyone with a last name that starts with A into the Smart Group. This is something Apple should (1) already have pre-programed into Address Book and (2) solved for by having the sorting I'm asking for above.

This conversion from Windows to OS X is going well, but OS X has quite a few work flow and common sense limitations that people don't seem to talk much about!

Another reason making these Smart Groups was such a pain is: after I named each of the Smart Groups, I hit the tab button, thinking it would take me to the Card drop-down. Nope, it went straight to the fill-in field where I typed "A*"! Why, when I hit tab in OS X, does the cursor go all over the place instead of to the next obvious input field? It always skips over drop-downs I can easily select from using my keyboard!!!! Arrrrg! Common Apple... simple stuff!!!