Version of Outlook is 2003.
After much time on the phone with Microsoft last week trying to install service packs for Office and SQL (cannot connect properly to the SQL Reporting Services while trying to install SP1) with no success, we've decided there has got to be something wrong with the install of something and we are going to rebuild the server. Fortunately, it is a test server so we have the luxury to do so.
I will add another reply to this post with the results.
Thanks!!