"Outlook could not create the work file. Check the TEMP environment variable"

This was the error I had when I had installed Office 2007
Word also had this error :

"Word could not create the work file. Check the TEMP environment variable"

After a while of searching and cursing, I've finally found the solution!

First I've took a look at the environment variables, but they pointed to the right directory -> %USERPROFILE%\Local Settings\Temp a lot of sites suggested that that was the problem, but the path was/is valid when I typed it in the explorer.

After a lot of configuration swimming I encountered that outlook also uses registry keys, more specificly these:

HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\Shell Folders

HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders

The 'cache' key of both registry entries.

When opening regedit, I saw that the 'User Shell Folders' key was pointing to a k: drive (which I didn't have): k:\Local\Microsoft\Windows\Temporary Internet Files

The 'Shell Folders' was pointing to C:\Users\Whizzo\AppData\Local\Microsoft\Windows\Temporary Internet Files

So I've changed the k drive to my user profile's temp folder:
%USERPROFILE%\Local Settings\Temp

And BAM, the problem was solved!!

I hope this is helpfull for someone ;)