Microsoft released a buggy version of a Service Pack 2 update for Office 2011 on 4/12/12. This update was reported to sometimes corrupt the identity database. When this happened users were prompted with the message “Please upgrade the Office database” when launching Office apps, and subsequent repairs of the database fail. Those that didn’t have a recent backup of the identity database were forced to create a new one, therefore potentially losing archived email in Outlook.

It was soon discovered that if you performed a database rebuild prior to applying SP2, this corruption problem did not occur.

Microsoft pulled the SP2 update from their AutoUpdate servers on 4/19/12, and on 5/25/12 they re-released it along with a 14.2.1 updater that fixes the identity database corruption issue. So theoretically, if you apply the SP2 updater and then apply all other Microsoft updates, you should not experience this corruption problem… however I personally would recommend performing a database rebuild prior to applying SP2, just to be safe, especially if you have any archived email in Outlook “on my computer”.

For those who applied SP2 and had their identity database corrupt, there is a method for creating a new identity and manually copying the database headers from the corrupt database, allowing the newly created identity database to be become a working copy of the corrupt one after a rebuild. This is outlined here: http://reviews.cnet.com/8301-13727_7-57415966-263/database-corruption-causing-woes-for-some-office-2011-sp2-users/