Dear Shiraz,
thanks for your reply. The problem was not in my datasource, but rather in the way I added the ContactSelector control to the control toolbox in Infopath. For selector to work this way, when you're adding the ActiveX to Custom controls, this is the way to go:
1. choose "ActiveX Control" and select "Contact selector" from the list
2. choose "Do not include .cab file", then choose "Value" for binding property
3. This is the crucial step: For field and group type, choose "Field or group (any data type)" and select text for data type
Hope this helps to someone.
Boris