The thing that seems most likely to cure this (I still don't know what
causes it) is to use e.g. Word Office button|Word options|Resources|Run
Microsoft Office Diagnostics (using the Diagnose button). There may be an
equivalent option in Outlook 2007 - I don't know.

A number of people have reported similar problems over the years - recently
I suggested to someone that she contact MS support and she later reported:
<<
It turns out there was something with my Word. They uninstalled microsoft
office, deleted the relevant registry files and reinstalled, and it all
worked beutifully!

i.e. unfortunately, we never found out the details of the cure :-(