Good news, for me, that is. I gave up trying to sync Outlook on my desktop Windows XP machine. I switched to my Windows XP laptop and now everything works. I was able to sync my Outlook email accounts, contacts, calendar (yes, even the calendar synced), Explorer bookmarks, all that junk. I dunno, something on my XP desktop must be causing some sort of conflict between Outlook and iTunes. At some point I may rebuild the desktop machine (something you Mac folks aren't familiar with!), but that's a lot of work.
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