A problem was discovered with the use of a product called Internet Download Manager http://www.internetdownloadmanager.com - which is one of the more popular utilities on download.com with almost 4 million downloads and Outlook 2003 OWA.
The current version 5.05 causes a problem with OWA not being able to spell check or send out emails to recipients. The unreleased beta version has also been tested and it also causes the problem.
It has been installed on 4 different PC's and reproduced the problem with OWA each time. The problem happens with either their basic browser integration or their advanced browser integration.
So far, the only fix is to uninstall their product.