Solution: Uninstall the "Skype Click to Call" program.
Last week I installed Skype on my Windows 7 box (32-Bit). Little did I realize that installing Skype with "Skype Click to Call" would break Outlook 2010. I had been struggling with finding a solution. Thankfully, some wise MVPs shared the solution which I found at the link below.
Thank goodness and thank you to Ulodesk who shared the solution!
http://www.msofficeforums.com/word/8438-paste-keep-source-formatting-lost.html
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