It appears that update roll-up 2 is not compatible with the update roll up 1 Outlook client for Microsoft Dynamics CRM 2011. The same day that Microsoft Released roll-up 2 there have been several people complained of strange errors. This is mainly seen where customers are using CRM Online at this time and it appears that installing roll-up 2 fixes the issue.
Update 1: as of 6/3/2011 Microsoft's suggested fix of upgrading to update rollup 2 to fix the problem is not working for some CRM Online clients.
Update 2 :as of 6/3/2011 Microsoft says it will have a fix out within 2 weeks.
- I hope this helps!