I did an investigation and this method seems to work, at least for me. The steps are summarized below:
- Close/kill outlook.
- Type the following in Start->Run (Windows+R key) or search box
A explorer window will pop up showing the contents of the above folder
- Look for a folder named as the SID of the logged on user (starting with something like S-1-5-21-) and rename it by appending .old or -old to its name.
- Start outlook and enter the username/password when prompted (check to save the passwords by outlook) and the above folder will be recreated.
- Sit back and relax.