Windows – The procedure entry point DecodePointer could not be located in the dynamic link library KERNEL32.dll

The answer is in your screen capture:

451 Exploitable Server
See: http://www.sorbs.net/lookup.shtml?117.197.185.192

I went to the URL. I got this message:

Database of vulnerable/hacked servers
Address and Port:   117.197.185.192
Record Created: Mon Dec 28 22:59:36 2009 GMT
Record Updated: Mon Dec 28 22:59:36 2009 GMT
Additional Information: Spam Sending Trojan or Proxy attempted to send mail from/to from=<ordinarilyuc9@vancouverislandwomenssports.com> to=<belial@paticipating.domain> proto=esmtp helo=<bntxwxq>
Currently active and flagged to be published in DNS
If you wish to request a delisting please do so through the Support System.

What this says to me is that your SMTP server is a known vulnerable server. Outlook is protecting you.

Instead of trying to reinstall Outlook, you should consider using a separate SMTP server before jumping to conclusions. Seriously.

I hope this helps.

Yes, EncodePointer was introduced in Windows XP service pack 2, so it is very likely that the reason the software is not working is that you do not have this installed. However, this doesn't mean you need to hook the computer to the internet.

Instead, use another computer to download service pack 3 and put it on CD or USB stick. Copy it to the hard disk of the target computer, then run it. You probably don't need any of the other updates.

(Note: ignore the bit on the download page that says "This installation package is intended for IT professionals ... please visit Windows Update". In this situation, this package is the simplest way of installing the service pack, even for a single computer, and the process isn't particularly difficult.)