I too had this problem last night. I found your post when I was looking for a solution and thought I should come and tell you I did find one!
- Close Word and Outlook completely (everything else, including internet explorer can stay open)
- Click Start and type regedit in the 'start search' box.
- Hit enter and the Registry Editor will open.
- Navigate to HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\Word\Data by double clicking on 'HKEY_CURRENT_USER' on the left hand side, then 'Software' then 'Microsoft' and so on.
- Right click on the 'Data' folder, on the left hand side, and click rename and call it 'Baddata'
- Close the registry editor and restart word.
That should solve your problem. It involves editing the registry which, if you're worried about it, it's always advised you ask someone with experience to help. However, if you follow the above instructions exactly, there is nothing that can go wrong.
Good luck, I hope it solves the problem.