When using Active Directory or a non-Apple LDAP server for authentication, you may need to enable cleartext authentication to Calendar or Contacts services (which are iCal and Address Book services in Lion Server). If you choose to use cleartext authentication, Apple strongly recommends the use of SSL to provide a more secure environment.
In OS X Server (Mountain Lion) and Lion Server, the Contacts (Address Book) service uses the same authentication method as the Calendar (iCal) service. See instructions in this article.
To enable clear-text authentication for the Address Book service in Mac OS X Server v10.6 only, execute the following commands in Terminal:
sudo serveradmin settings addressbook:Authentication:Basic:Enabled = yes sudo serveradmin settings addressbook:Authentication:Digest:Enabled = No