Templates are Converted to Plain Text Messages

This issue (and many others) was originally fixed by the July 11 hotfix and were rolled into the August 30 2011 update.
Description of the Outlook 2010 hotfix package (x86 Outlook-x-none.msp; x64 Outlook-x-none.msp): August 30, 2011

Users who create templates in Outlook 2010 are discovering that the resulting messages are converted to plain text when sent using a SMTP server.

When the same message design is created from scratch and sent, it works as expected; only messages created from templates are affected. Templates also work as expected when sending from Exchange server mailbox; only users with POP3 or IMAP accounts are affected.

We have two solutions until this bug is fixed. I think the easiest fix is to save the design as Stationery instead of a template. The first time its used, select it from New Items, Email Message using… More Stationery but after that it will be listed at the top of the New Items, Email Message using… flyout. If you need to use a template, set the contact to always use rich text.

If you save the design as stationery, you’ll need to save it in HTML format in the Stationery folder under your user account so it will be listed in the Stationery picker. An easy way to access this folder when saving the template is to type %appdata% in the filename field and press Enter then browse to the Microsoft\Stationery folder.