Outlook 2007 treats user cert as invalid

I have a win7 workstation in a win2003 domain with an enterprise CA. I have
installed a user certificate in my account store and configured my Outlook
2007 to use the certificate for signing and encryption.

But no matter what I do when I attempt to sign or encrypt an email I get:

"Microsoft Office Outlook cannot sign or encrypt this message because you
have no certificates which can be used to send from the e-mail address

The certificate is available but Outlook for some reason will not use it. I
have posted this issue on the Outlook forum and searched the Internet without
result. My thought is that perhaps the certificate is not the correct format
for Outlook.

How could I check this?
Any other ideas?