Mail Format options in OL2000 grayed out

We have Outlook 2000 implemented on various workstations throughout our organization along with Office 97 (Word, Excel, Powerpoint, etc.) There is one peticular user that uses Outlook 2000 and has tried to change the Mail Format option to enable "Use Microsoft Word to edit e-mail messages", but the options are grayed out. He has Administrator permissions, but that seems to not help. I have relentlessly looked for a solution to the problem in KBs and TechNet on MS websites, but could not find an answer. I have tried uninstalling and reinstalling Outlook and Office 97 one after the other and came up unsuccessful. Does Exchange 5.5 control or implement users policies or is there a workaround? Thanks.