There has been a new patch released for the Sales for Outlook client which addresses about 55 of the previous issues with the Outlook client (which I’ve listed below). The patch is available here. Considering all the issues that can occur with the outlook client it would be worth applying this patch before going through any troubleshooting.
The following key updates and hotfixes are included in the update rollup:
833621 Microsoft Business Solutions CRM Sales for Outlook 1.2 Enhancements
834640 Attachments to e-mail may not be sent in Microsoft CRM 1.2 Sales for Outlook
835582 Certain sales orders and quotes fail to open and an error message occurs in Microsoft CRM 1.0
837059 Update to Microsoft Business Solutions CRM 1.2: Add Coordinated Universal Time +12:00 to the list of selectable time zones
840058 An Internet Explorer message appears when you promote an e-mail to a Microsoft CRM activity in Microsoft CRM Sales for Outlook 1.2
870635 An update is available to correct problems of Microsoft Business Solutions CRM working on Microsoft Windows XP Service Pack 2
873261 Microsoft Business Solutions CRM Sales for Outlook 1.2 Performance Enhancement Update
888006 Microsoft CRM toolbar occasionally cannot be loaded in Microsoft CRM Sales for Outlook 1.2
892352 When you are offline in Microsoft CRM 1.2 Sales for Outlook, you cannot open records that you own or you cannot see records that you own
830360 Default picklist value in an Opportunity, Contact, or Account is not set if the record is created from Lead conversion in Microsoft Business Solutions CRM
832869 After daylight-saving time starts, Advanced Find may not return records that were created before that date in Microsoft CRM and in Microsoft CRM Sales for Outlook
833621 Microsoft Business Solutions CRM Sales for Outlook 1.2 Enhancements
834640 Attachments to e-mail may not be sent in Microsoft CRM 1.2 Sales for Outlook
835296 E-mail templates are not sorted in alphabetical order in Microsoft Business Solutions CRM 1.2
835306 When the last stage in the Workflow sales process rule is "Change the State to Won," the Actual Close Date field is not populated in Microsoft CRM 1.2
835307 The Created On Last 7 Days column in the Advanced Find dialog box returns all records instead of the records that were created during the last seven days in Microsoft CRM
835314 Column headings disappear when you scroll right and then click the Preview icon to view a record in a custom view in Microsoft CRM 1.2
835316 The URL field is no longer an active Web link on the product, unless you are logged on as the Integration user in Microsoft CRM 1.0 and 1.2
835582 Certain sales orders and quotes fail to open and an error message occurs in Microsoft CRM 1.0
837059 Update to Microsoft Business Solutions CRM 1.2: Add Coordinated Universal Time +12:00 to the list of selectable time zones
839156 Unable to close an opportunity if "User Provided" is selected for the estimated revenue and no revenue amount is specified in Microsoft Business Solutions CRM version 1.2
839160 You can select deactivated entities in the Regarding field of an Appointment activity in Microsoft CRM
839163 Microsoft CRM 1.2 Post URL action fails when calling a Web service or Web application that performs a long running operation
840058 An Internet Explorer message appears when you promote an e-mail to a Microsoft CRM activity in Microsoft CRM Sales for Outlook 1.2
840306 Using the Find field to search for text does not display the results unless you are on the first page of the results list in Microsoft CRM version 1.2
841411 Unhandled exception occurs when working with existing E-mail Activities in Microsoft CRM 1.2
841648 A message appears in the Check Names dialog box when an Appointment record is updated in Microsoft CRM Sales for Outlook 1.2
842539 Modified On and Est. Revenue values on the opportunity form are not updated in Microsoft Business Solutions CRM 1.2
842540 An Internet Explorer script error occurs when you try to refresh the Filter Criteria page in Microsoft Business Solutions CRM 1.2
843172 The custom picklist field is set to NULL by default on Quote records created from the Opportunity form in Microsoft CRM 1.2
870575 Carriage returns in the quote's description are removed on mail merge from Microsoft CRM Sales for Outlook 1.2
870578 Microsoft CRM 1.2 hotfix rollup for the problems that are documented in Knowledge Base articles 832869 and 835307
870635 An update is available to correct problems of Microsoft Business Solutions CRM working on Microsoft Windows XP Service Pack 2
873261 Microsoft Business Solutions CRM Sales for Outlook 1.2 Performance Enhancement Update
885368 You cannot create a contact in Microsoft Business Solutions CRM 1.2
885754 The Microsoft CRM 1.2 Sales for Outlook client or Web client may become unresponsive during Advanced Find searches
886283 An error occurs after you configure Microsoft CRM 1.2 to use a non-U.S. currency number grouping format
886355 Microsoft CRM 1.2 Hotfix Rollup for 840058, 841648, 843172, 870575, 888004, 888005, and 888006
887842 You receive an “Error: This is an unexpected token. The expected token is 'SEMICOLON'. Line 1 position 1780” message when you click the Sales Process tab in Microsoft CRM 1.2
888004 Cannot create orders that have 0.00 price per unit for the order product in Microsoft CRM 1.2
888005 Closing a Microsoft CRM task through Microsoft Outlook does not set the Actual End field on the task in Microsoft CRM Sales for Outlook 1.2
888006 Microsoft CRM toolbar occasionally cannot be loaded in Microsoft CRM Sales for Outlook 1.2
889705 You receive an error message when you go offline in the Microsoft CRM 1.2 Sales for Outlook-based client
890081 The same date appears two times in the Microsoft CRM 1.2 calendar
890485 You receive an error message when you try to accept an activity from a Microsoft CRM queue
890594 When you create mail merge activities in the Microsoft CRM Sales for Outlook client, the actual end date for these activities is not set
890596 You cannot read e-mail messages in Microsoft CRM Sales for Outlook when the messages are encoded in the KOI8-R, KOI8-U, or ISO 8859-5 character sets
890597 A Microsoft CRM workflow that is based on an Opportunity Change Status event does not work correctly after you install Hotfix KB833621
890598 After you install hotfix 870578 in Microsoft CRM 1.2, Advanced Find searches that use the On operator return records for the day before the date that you specify
891715 After you apply hotfix 870578 to Microsoft Business Solutions CRM 1.2 Server, the picklist fields in all the list views do not display their selected values
870578 Microsoft CRM 1.2 hotfix rollup for the problems that are documented in Knowledge Base articles 832869 and 835307
891963 When you open an opportunity that contains associated products, Microsoft CRM times out
891966 A corresponding activity is not created when you reply to an e-mail message in Microsoft CRM
892305 Microsoft Business Solutions CRM version 1.2 may stop responding when you create several Notes
892352 When you are offline in Microsoft CRM 1.2 Sales for Outlook, you cannot open records that you own or you cannot see records that you own
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