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MS Outlook 2010: "This operation has been canceled due to restrictions in effect on this computer. Please contact your administrator."

I have a client who was recently issued a new Windows 7 PC.  He has never been able to click any links from within Outlook: He always gets the error "This operation has been canceled due to restrictions..."  A couple of possibly related problems: Windows Update (through Control Panel) does not work normally; it returns error code 80244019, and cannot search for updates.  I am able to update his PC by clicking the "Check online for updates" link.  Also possibly related is that any time he tries to access the Office 2010 Help system (by clicking on the blue "?"), the help system cannot connect to Office.com.  It doesn't throw any errors, but it clearly says it is not connected, and will not connect when you click the link to connect to office.com.

I have scanned with Malwarebytes, Hitman Pro, and TDSSKiller.  I have repaired the MS Office installaton.  I have checked the Hosts file.  I have reset WindowsUpdate settings using the Microsoft Fix.  The PC is fully up to date (minus Service Pack 1).  OS: Windows 7 x32.
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IanTh
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is it just his account
What happens if you remove all of the security restrictions (temporarily) from within Internet Explorer?  Try eliminated the restrictions within each zone for testing purposes.
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Nivlesh
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IanTh: It is all accounts on the PC
Operationnos: He has the same security setup as everybody else in the office, but his computer is the only one experiencing the problem
Nivlesh: I will try your suggestions.  I've set I.E. as the default browser before, but not through the Default Programs area, only Internet Optons.  I'll let you know how it works out.
Nivelish, setting Internet Explorer as the default didn't resolve the issue (though it did make all of his internet shortcuts on the desktop turn to globes), but the MS article for the missing registry entry did the trick.  He can now click links in Outlook.  However, he still cannot use Windows Update normally...Any ideas on that one?
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