Appears to be a bug in Windows XP or Microsoft Office 2003.
I did two solutions at the same time. So I am uncertain which one actually did the job, if not both.
1. Regedit: Changed(not add) a key value at
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders
The value of key AppData was changed from %USERPROFILE%\AppData\Roaming to %USERPROFILE%\Application Data
2. (I think this one actually did the job)
Removed Outlook email account and readded.