Found the answer to this problem in another post by Sue Mosher.
I created a new profile and was able to associate my data file to that one.

Thanks

"Sol" wrote:

I have installed Office 2007 (msdn non-beta). When I try to send mail I get
the message "Outlook cannot start because a data file to send and recieve
mail cannot be found". When I go to Account Settings and select "Change
Folder" on my account, I am shown my Personel Folder. When I select the Inbox
folder and click OK, I get a message
An unknown error has occorred, error code: 0x8000ffff.
The same happenss If i try to create a new Outlook Data file and set my
account to its Inbox.