To all those who are experiencing the same issue (posts around Dec. 22, 2011) with iTunes not recognizing Outlook 2010. I have some good news. Read on.
I spent the morning speaking to several levels of Apples Support. They checked my iTunes and all of my settings. They could not figure out why all of a sudden iTunes was not recognizing the presence of Outlook. They asked me to run a Repair, Diagnostic, or Reinstall Outlook. In short, they suspect something got corrupted on the Outlook side of my recent updates.
I checked my Windows Update log, and noticed that I had a number of Microsoft Office (Home and Business 2010) around the same date of the iTunes patch (around Dec. 15, 2011). Since, Office 2010 is so different than the earlier versions of Office, I resorted to calling Microsoft Support to help me with reparing Outlook. Apparently the various Office Diagnostic features under the old Tools menu have been stripped out of the usual place in Office 2010. In short, Microsoft Support did a Partial Install of my Outlook 2010, and now iTunes recognizes Outlook once again. Since, I let the Microsoft support person take over my PC remotely, I cannot exactly tell you all the steps. However, I can try summarizing.
Apparently, there are some news ways to repair applications without having to completely Uninstall and Reinstall them. Now uunder Windows 7 Pro, under "Programs and Features" in the Control Panel you can Repair or partially install applications. In the Program and Features window, highlight your Microsoft Office application. Then go up to the Menu bar and click the Change tab. You will see another Microsoft Office window pop up. You will options to Repair Office. Once, the Repair step is done, Restart your computer. When the computer boots back up, launch iTunes. Hopefully, you should see an iTunes dialogue box showing interaction with Outlook.
This solved my problem. ITunes sees Outlook Contact, Calendar, etc. So, in my case it was a coincidence my iTunes and Windows Office update occurred around the same date. But, the culprit was Microsoft Office.