That's a Windows setting, not an Outlook setting.  Outlook doesn't have a
clock.  It uses Windows for that.

You don't state your version of Windows.  For XP, click Start>Control
Panel>Date, Time, Language, and Regional Options>Change the format of
numbers, dates, and times>Customize>Time.  In the "Time format" drop-down,
choose "H:mm:ss" or "HH:mm:ss" if you want the hour to have one digit (when
less than "10") or to have two digits always.  If those values aren't
available in the drop-down, just click in the field and type them in.