Outlook 2007 will not start for one user in SBS 2003 domain, other

I just added a new computer to our SBS 2003 domain. OS is xp sp2+. Office
2007 small business version.
The problem repeats on 2 different computers, both just added to the
domain. Both have the same software configuration.
For one particular user, call it user1, when user1 is logged into these
computers Outlook simply refuses to start. Word starts but does not allow
the user to save a document. No messages appear. Outlook simply says
"Outlook cannot start". User2, same domain etc, no problems. Looked at the
users settings on the server and cannot see any issues.
User1 on an existing xp sp2+ computer can login and use office 2003 with no
issues.
I tried deleting the email profile, deleting the user from docs and
settings, reinstalling Office 2007. No change.
If I create a new user on the server and login to the new computer as new
user, works fine.

Please suggest something.
Thanks.