I have had this problem before in Word 2007 after a new update. I found the solution on microsoft's site where I had to delete a data folder in the registry and that solved my problem.
The outlook problem I'm having is very similar but with a few differences.
The mouse does not work when editing an e-mail. I have to use my arrow keys to move around.
It happened after a new update (Unfortunately I Cannot restore)
Outlook was open when the update ran. (It is scheduled after hours)
The mouse does not work even if you are not editing the E-mail (In the preview pane when trying to highlight text)
When I close Outlook and re-start it again the problem is resolved for a few minutes then it starts up again.
There is no similar data folder in the registry, like the one word has, that I can delete.
Microsoft does not have help on this topic.
I have Office 2007 Proffesional on a Vista machine.
Please help 1!!