Yes, it's XP
I haven't touched IE at all. That's running fine.
All was ok one evening when I shut down, no problems at all. The following evening the first mail I tried to send jumped straight into the 'Inbox' with the error message as described above in the origional post. I have even tried running the repair function from the Office 2007 installation disk to no avail.
There are no other error messages apart from what I've stated