I'm seeing the same issue on a Windows XP professional SP2 running Outlook 2007. Rebooting the system didn't help.
I also tried it on a Vista Home Premium and didn't have any issues. In this system however we're running Outlook 2003, so it's not much of a comparison.
The only reference I have for what may have happened is in the event logs, but that's not much help
---
Event Type: Information
Event Source: MsiInstaller
Event Category: None
Event ID: 11708
Date: 2/18/2008
Time: 4:04:26 PM
User: xxxx
Computer: xxxx
Description:
Product: ZCS Connector for Outlook -- Installation failed.
For more information, see Help and Support Center at
TechNet Events And Errors Message Center: Basic Search.
Data:
0000: 7b 41 43 30 35 33 33 42 {AC0533B
0008: 42 2d 31 34 34 34 2d 34 B-1444-4
0010: 33 41 36 2d 41 33 30 34 3A6-A304
0018: 2d 44 35 38 46 37 41 35 -D58F7A5
0020: 33 34 46 41 36 7d 34FA6}
-----
As far as I can see Office is all up to date.
Any suggestions?