For some reason and suddenly every time I started Outlook 2007, this dialog popped up:

The fix is to run outlook.exe with the argument resetnavpane. For example on my Windows XP x64 machine, the command for Outlook 2007 is this:

C:\Program Files (x86)\Microsoft Office\Office12\Outlook.exe /resetnavpane

This will clear and regenerate the Navigation Pane for the current profile. I have no idea how it got corrupted!

I was looking for a complete list of differences between Windows SharePoint Services 3.0 and SharePoint Server 2007. Microsoft did a nice job summarizing all the differences here.