In my Outlook 2007 client, embedded images in incoming emails appear resized when the message is viewed. The incoming images are resized to 198px wide, despite the original size. If it was larger, it will be shrunk; if it was smaller, it will be enlarged; the aspect ratio remains the same (the image is not stretched).

This is local to my client only (i.e. another Outlook 2007 client reading the same IMAP inbox will see the image in the correct size. Similarly, viewing the email message in a browser will display the correct size). This happens regardless of whether width/height attributes are set on the image tag in the HTML. Zoom is set to 100% in my message window; text and other elements are not distorted from the original.

In addition to this, outgoing HTML messages with images embedded in the same way are resized as they are sent. The outgoing images are all scaled to have a width of 247px. The source HTML of the outgoing message is changed after pressing Send so that the tag's width attribute is 247 pixels and the image file itself is also resized.

These problems only occur with HTML messages; Rich Text messages do not have the same problem. I have already tried reinstalling Outlook and have it fully patched up to date.

Why is this happening and how can I stop this?