This Outlook problem is the EXACT same issue I have after upgrading, for the past two days. It is definitely an issue that needs a permanent fix.
The Terminal solution did work but it is a repetitive, temporary fix as I had to do it again today with the start up of Outlook application. I assume it is a good way to actually have you off the client heavy application and into the cloud version of Outlook, but annoying as I haven't migrated all the folders there and of course an internet connection is always required. I guess it's time to see about migrating the whole use of Outlook to the Office 365 site so I can have a permanent, working back up instead of relying on Time Machine or other arduous backup process.
Regarding folders, most of the personal folders were moved from the previous location at Outlook start up. Don't worry, you just have to drill down into collapsed folders to find your previous personal folders. It was a "shock" for a minute or two because you're just expecting more upgrade troubles.
The fix needs to be published and permanent as the Terminal solution is helpful and does work, it shouldn't be a permanent solution. Not sure if it is necessary to do a backup or a rebuild, but I did both before using Terminal.
From David-Sk; Namely the steps:
1. Open Terminal (In Applications-> Utilities -> Terminal
2. Type: defaults delete com.microsoft.Outlook (to delete the old preferences).
3. Type: killall cfprefsd (to kill the cached prefs)
4. Launch Outlook
The pop up window will look at a new install or an import but don't do that, just press 'continue' on the bottom right side of the pop up window the intro screen and so far Outlook 2011 is opening windows.
It does have to be Repeated, at least from my experience. So, just write down the steps from David-Sk until we get a permanent fix.