There is a problem with the auto-update installer. If you re-download the update direct from microsoft and re-run the installer that solved the problem for me and seems to solve a lot of peoples problems.
I did have to re-add my credentials and recreate my accounts, which was a pain in the buttocks.
It also took a while for Outlook to synch the server folders with the local folders, which ate up a lot of my bandwidth, but in the end it all worked out. I should also mention that I did have to quit Outlook once or twice while it was synching, because it seemed like it froze. Other than that, the synch was pretty smooth.
I think that what really helped me a lot, was that a while back, I created all of my folders and mail rules on the server instead of locally. Had I not had all of my folders and rules set up on the exchange server, I’m pretty sure that I would have had to recreate all of my mail rules, folders, etc. which would not have been fun.
I’ve been using Office for Mac for years and have never had problems like this before. At least, none that I can remember anyway.
I hope the problems with this update are not a forbearer of things to come.