Dammit. I've just tried it and it worked fine :-(
I'm struggling to replicate or find any info on this issue. Have you had chance to try it from a brand new mail profile?
I know you cannot go back to outlook 2007 from outlook 2010 without deleting your profile so it must have been upgraded in some way as part of the installation. I'm wondering if the upgrade missed something.
ref:
http://www.office-outlook.com/outlook-forum/index.php/m/671931/#msg_671931Do you still have any outlook 2007 machines you could test it on, so we can confirm it is definately outlook 2010 thats at fault.
Other than the registry edit you have already done, I have failed to find any similar issues elsewhere.