Thanks for all your help - I have sorted it now by not installing the Office 2007 updates - Rarely use Office anyway other than Outlook
When I started Outlook 2003 - it greyed out and came up with a box that said Microsoft Outlook has stopped working - when I clicked on start > all programmes > Office > Outlook 2003 I right clicked and asked for compatibility troubleshooter > it then told me there was a compatibility problem - I had no other messages or error codes. The only thing that was different to the day before was 5 updates, after I system restored to the day prior to the updates it worked.
I downloaded them again and Outlook had the same problem so I system restored for the 3rd time downloaded the updates and hid all the ones that had Office 2007 in the title and everything is OK now.
I run a 32bit Windows 7 Home premium by the way. I can only assume that one of the Office 2007 updates is causing the compatibility issues, as per my previous I have no idea why it's downloading Office 2007 updates any way!