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Automatic Hyperlink Formatting in Outlook 2007 no longer functional

Users are no longer able to click on URL's in plain-text messages received in Outlook 2007 either in the Preview Pane or when opened into a separate window. Previously, any properly formatted URL would be automatically converted into a hyperlink when displayed. This started after the current round of updates that Microsoft pushed out (April 2009).

Is there a way we can re-enable just this function or establish a trusted zone of URL's that will automatically generate without uninstalling a security update?
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apache09
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Does it work in Safe Mode?

Close Outlook and open using
Start>Run>Outlook.exe /safe
Also check to see that the registered file type is correct:

To do this, follow these steps:
On the desktop, double-click My Computer.
On the Tools menu, click Folder Options, and then click the File Types tab.
In the Registered File Types list, click URL:HyperText Transfer Protocol, click Advanced, and then click Edit.
In the Actions box, type open.
In the Application used to perform action box, locate Internet Explorer (Iexplore.exe), and then click Open.
In the Application box, type IExplore, and then click OK.
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