A few days ago my Outlook 2007 would lockup once and a while. Thinking it was a PST issue, I rebuilt it, move to a backup computer but the issue continued.

After many hours of research and I was able to identify the issue and a solution. Google didnt have anything on the issue so I wanted to share it. —UPDATE- There is a bit of data on the Paypal forum now–

If Outlook, Incredimail or other email client crashes when you try to open or preview a Paypal email, (issue started 10-12-2011) the problem is the tracking pixel inserted into the HTML email. You can view these emails in text format or put a entry in your HOSTS file to avoid having Paypal track your email.

HOST File Fix for Paypal Crashing Outlook;

• Run Notepad.exe as an administrator
• Open the file HOSTS at this location – C:\Windows\system32\drivers\etc\hosts
• Add the line below to the end of the file
• 127.0.0.1 102.112.2o7.net (just copy and paste it as the one of the zeros is actually a “O”)
• Save the file
• Enjoy a crash free Outlook experience for now

Paypal has a history of rolling out half backed solutions and taking months to resolve the issues caused. I expect this to be a irritating issue for many people and that it takes months to resolve.