Sounds like something is going wrong with your initial sync. What we need to help diagnose is get the http trace and debug output.
First, you'll need debug view. It allows you to view the windows debug stream.
Next, downlaoad the WinHttpTraceCfg.exe trace configuration tool (part of windows server 2003 resource kit).
Read the documentation for the tool.
Turn on http tracing to the debug stream by executing the following (make sure to shut down outlook first).
With debug view open, start outlook and click send/receive. After it has spewed all the output, save the log in debug view, zip it up, and send it to me. I'll PM you my email address.
WinHttpTraceCfg -e 1 -d 1