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Outlook 2007 - New install - Problem with using Outlook 2003 97-2002 format .pst file?

We keep our .pst file on a network drive.  Mine was created using Outlook 2003 and apparently the file format is 1997-2002.  

I've done a fresh install of Windows 7 (whatever version you run on an enterprise) , and MS Office 2007. Outlook created a pst file on the local drive for me and it works, and is currently set as the default.  But, I'm trying to set my pst file that resides on the network drive as my default.  

I'm getting a msg that says the 97-2002 is not a Unicode file.  And, to use one or turn off offline folders.  I turned off the offline folders but no joy.

What do I need to do to get this rolling?  Do I need to export and import data from one file to another?  Is there a setting or switch that would help?

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WestezAuthor Commented:
Here's the exact msg.

The Personal Folders file [.pst] you selected does not match the format of your offline folder file [.ost].  To correct this select a Personal Folders file that supports Unicode or disable the use of offline folders.
Neil RussellTechnical Development LeadCommented:
Explination and steps to cure here at Microsoft.
WestezAuthor Commented:
Thanks a bunch.
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