Cached Exchange mode - you can use outlook when you aren't connected to your exchange server as a copy of your mailbox is cached locally. It was introduced in Outlook 2003. The old method, online mode, does not keep a copy of the mailbox on your computer.
Go to Tools, Account Settings - it might say 'online' to the right of the account name, if not, double click to open the account settings. Is the option checked to use cached mode?