Seems like the simplest way to implement this would be to add an option in the address book that says 'Automatically apply Label XYZ to this person's incoming m

Seems like the simplest way to implement this would be to add an option in the address book that says 'Automatically apply Label XYZ to this person's incoming messages' (but with less words than that). Or a filter option for the 'From:' box that says 'In my address book' or something like that.