SageForum for UK versions of Sage 50- Help and support.

I came across this same issue , interestingly with Outlook 2003 . We contacted sage support and they dialled in to the PC.They were able to send the test email from Sage , but couldn't get emails to send through Outlook . Eventually they gave up and said it wasn't their issue and that it must be a microsoft issue .

Broken data seems to fit the issue as the layout worked fine on my data and on the demo data.
I have seen data that is broken but that error checking fails to find.
If you encounter this then a "reindex and compress" would be a good place to start.