Some users get an error dialog box when they try to connect a calendar or tasks lists to Outlook (using Actions – Connect to Outlook. The error is:
Outlook cannot add the folder because creating a new Personal Folder (.pst) file isn’t allowed on this computer
There are quite a few posts on how to resolve this. You need to edit the registry settings for Outlook. To do this, first create a system restore point or back up your registry in some other way. Then click Start, Run, and in the textbox type regedit. Always be careful using regedit… Navigate to the Office root here:
You’ll see various numbered folders for curent and previous versions of Office. Look in the numbered folder that matches the version of Outlook you’re using now, for Office 2007 this is 12.0. Look in the Outlook subfolder. So for example this is the folder for Outlook 2007:
In this folder look for the DisablePST key and if the value is 1, change it to 2. Changing it to 2 prevents users from creating PST files manually, but allows the system to create them so that Outlook can connect properly to SharePoint. If you change the value to 0, users will be able to create a local PST file which is something that many organisations running Exchange want to prevent. If you have a group policy that sets DisablePST to be 1, you can change the policy to set it be 2 instead so that Outlook can work properly with SharePoint.
I also found that having set DisablePST to be 2 to allow local PST files, and connected a SharePoint calendar to Outlook, I can reset DisablePST back to 1 and I can still add new SharePoint calendars into Outlook without error. It just takes that initial connection to set it up.