I used Sean's advice and it worked for me in about 2 minutes. The instructions to convert the end of line character in TextWrangler are below.
The first thing I did was open the mbox file in TextWrangler (after making a backup).
TextWrangler has a status bar at the bottom of its window and it shows what the current line end character is (it also shows file encoding, i.e. Unicode (UTF-8), the Line and column the cursor is currently placed on, etc.).
The three options shown that you can chose from, on TW v5.0.2, are: Unix (LF); Classic Mac (CR); Windows (CRLF).
I changed from the original setting for the file of Unix (LF), to the Windows version (CRLF). Please note Sean indicated the Classic Mac (CR) which works too, but I used the Windows setting and it worked fine on that setting as well.
I then saved the file.
Next, I followed the instructions for importing an mbox file - Open Outlook; Choose File menu, Import; Select "Contacts or messages from a text file" and click next (right arrow button on my version of Outlook); Select "Import messages from an MBOX-format text file" and click next; Choose your newly saved mbox file then the messages import.
The new folder will be shown and you can rename it to the folder name you want or you can simply move the messages to wherever you need them to be.
I didn't have many emails so was not affected by any file size issues that have been mentioned in this thread, but the method above overcomes the issue of the mbox files being blanked out when trying to import an mbox text file in Outlook. After following the above, you can choose the mbox file and import as normal and all images, signatures, attachments, etc., will be present and correct (well they were for me anyway).
So in case you missed the instructions from Sean earlier in the thread, the summary is:
1. Export mailbox from Mac mail.
The resulting mbox text file will not import into Outlook "as is" because the end of line character is a Line Feed (LF) and Outlook cannot use an mbox file with that end of line character.
2. To solve this, simply open the mbox file in TextWrangler, change the end of line character from LF to CR or CRLF following instructions above and save the file.
3. Then import the mbox file into Outlook using the normal import instruction above.
If you have TextWrangler, it takes about a minute to change the end of line characters and however long the export and import routines take depending on how big your mailbox was, which you would have had to spend anyway. It will also accommodate all your folders etc., because you are not changing anything from the default export and import routines, you will will get all the standard functionality. The only problem with the standard process is the LF character by itself doesn't work when Outlook tries to import an mbox file. Change that and you are in business having taken about a minute extra to change the end of line character in the file.
If you don't already have TextWrangler, you'll have to download it for free from the Mac App Store which might take another 5 minutes, but you get a great text editor too!
Free, fast, easy - thanks Sean, you saved me a load of grief.