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Thanks for the reply, I discovered the issue. My wife had created a separate pst file for all her folders. I have now added the pst folder and all our mail folders have been recovered. Thank you again.

I am also having issues with moving my Outlook 2003 pst file to Outlook 2007. I am unable to see any of the folders I had created in 2003. If I move the pst back to Outlook 2003 the folders are visible.