Setting up Outlook, error

I have Office 2007 installed on machine no issues. Windows XP. I
use Excel, Word, etc w/o issue.

I tried to install Outlook, so I can sync to my Iphone. I currently
have used Outlook Express w/o incident.

When clicking on Outlook, It starts to try and migrate settings
(from where I don't know)

Then I get an error message: Cannot open default email folders
Only Folders that contain MAIL or POST items can be created in Outlook
Connector.

I say ok and it all closes. No option to do anything else.

Thanks