A friend of mine, Chris Fenly from Waterstons, got in touch today about a weird problem he was having with two Windows XP SP 2 machines running Office 2003. Opening Word or Outlook generated the error "Outlook could not create the work file. Check the temp environment variable." It's an issue which a few people seem to have according to Internet search engines. Anyway, before I could be of any help, he'd fixed it.
On his machines HKCU\Software\Microsoft\Windows\Current Version\Explorer\User Shell Folders\Cache was pointing to %windir%\temp. He changed it to C:\Windows\temp and all was well. I didn't ask where his %windir% variable was pointing at the time - I wish I had now.