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MS Outlook 2007 Personal Folders Loop

I am setting up a new Dell Optiplex 330 and after installing most programs I was almost ready to exchange the computer when I opened Outlook 2007 one last time and got caught in a Personal Folders loop.  I get a dialog saying "This information service has not been configured, select an existing file to configure or type the name of a new file to create." which takes me to my \local settings\application data\microsoft\outlook folder looking for a .pst file.  If I choose one existing it loops back to "This information..." and if I make a new one it creates it but then loops back.  I have found some others on the web having the same problem with few results.  The same thing happens in safe mode.  I cannot do anything, it comes up immediately.  Here is a site with a similar problem.
http://www.eggheadcafe.com/software/aspnet/32490616/outlook-2007-creating-mul.aspx 
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If this is a new PC with no email downloaded then I would go to the control panel open the mail icon, delete the profile, and start over.
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