Thanks for your screen print. My Outlook 2003 has the exact same problem. Someone on another forum claimed to have the same problem and fixed it by using HELP>>DETECT and REPAIR in Outlook. No joy for me however.
If you find the answer, please share it with me, Ill do likewise.
I just fixed mine from info from another website. Wierd Wierd wierd!!! Only a Microsoft product!!!
Go into Internet Explorer. Click VIEW>>TEXT SIZE>>SMALLER. Fixed mine. I had mine set to MEDIUM!