For a while now, I was experiencing all kinds of issues with Outlook 2007 and Virtual PC 2007. For instant, when I'd be writing an email, the Ctrl+Arrow keys would work intermittently. This is really annoying, particularly when answering people's emails. The problem was even worse for Virtual PC 2007, where some keystrokes wouldn't be recognized until I pressed them 4-5 times.
Finally, I called Microsoft Tech Support. The guy looked over my process list and promptly decided that iTunes and Google Desktop were the culprits. For what reason, I don't know, but I was too tired to argue with the guy. And too desperate to get this working. Of course, uninstalling those apps didn't help one bit. In retrospect, I think, the support dude was getting rid of the competition :).
After I hung up with the support guy, a co-worker came over and attempted to troubleshoot. Pretty much, he identified SQL Prompt almost immediately, since it hooks into the keyboard stream. I turned it off and everything work great. I don't know why I didn't put 2 and 2 together, maybe I need to see the forest for the trees a bit better.
As clarification, this is SQL Prompt 2 - the formerly free, but still working fine, version.