I've now removed Office from the PC and re-installed it, still the same.

I found the NormalEmail.dotm file, renamed it and with the new file the problem is just the same.

Outlook is not in the Office 2010 Student & Home package.

I've been getting some other weird problems recently, like I can't open web address links I receive in WLM in Chrome, but Firefox is ok.

I think it's begining to look more like a WLM issue or even a Windows issue.