I couldn't find anything about Outlook and XP. I am sure there are, heck there are always issues.
Sorry not much help. I've yet to install XP. If you remove the account in Outlook and Set it up again from Scratch and try making a new folder call it what ever you want and point your store folder to it. See what happens.
If you need help with the Store folder let me know. I am assuming you know where that is already
