With SquirrelMail 1.4.2 the LDAP address book is only used when you compose a message, click addresses and start doing searches. However, if your LDAP server is configured to use ACL's, then you won't be able to see any addresses stored in LDAP. A set of patches was released on the SquirrelMail mailing list that allows you to specify a user to bind as, instead of binding anonymously.
See [this patch] or use latest SquirrelMail versions that include fix for non-anonymous LDAP bind.