Hi Natalie,
You can refer to Jesper's solution to troubleshoot this issue.
First, please use Windows Update to update Windows and Outlook 2007 client (click Start -> All Programs -> Windows Update). Make sure the latest service packs and updates are installed.
Run desktop setup referring to the steps below, this will check missing updates and perform some configuration on the computer. It will set up your computer to work with Microsoft Office 365.
1. Click Downloads under Resources.
2. Click Set up under Set up and configure your Office desktop apps.
@Jesper, many thanks for your solution.
Thanks,
Young Yang