Problem Connecting to MIcrosoft Exchange

Creating, sending and reading mails in the new format work correctly. However, if I  click on a link within an email in order to reply, I get the follwing:

"Connection to the Microsoft exchange is not available. Outlook must be on-line or connected."

Then there is box that appears called Microsft Exchange with a server name of MSN.com and the error comment of:"Cannot start Microft Office because the outlook.ost folder does not exist".

Any help would be greatly appreciated.

Thanks - Z