Things to try:
Resetting the Outlook Template:
Close Outlook and Search for outcmd.dat and rename it (something like outcmd.dat.old). Now open Outlook.
Create a new Outlook profile:
Go <a href=”http://www.outlook-tips.net/howto/profile.htm”>here</a> for a good how to site.
With Outlook open, click Help > Detect and Repair.
If it is STILL underlining, you could reinstall Outlook:
Go to the Add/Remove Programs in the Control Panel and highlight Microsoft Office. Click on Install/Uninstall. A menu will appear allowing you to select repair or reinstall, though you may need your original install disk.