When you first use Outlook, (2010 version for this example), you do not have the option to format the text in an e-mail reply, forward or when you create a new message. The bold, italic, underline and other formatting options are greyed out. Why?
The formatting is set to Plain Text and needs to be changed to HTML for the text formatting option to work. Outlook uses Plain Text as the default setting that all e-mail programs can read. However, this type of text format does not support the font options we are looking for. HTML is the better setting to use. It is the best format to use when you want to create messages that are similar to the traditional document, with a variety of fonts, colors, etc. When you use HTML, you know that what you send is what the recipient will see.
To make HTML the default format, open Outlook. Click on File, then Options. Select Mail and then at the top of the list look for Compose Messages. The option to change the format is to the right of “Compose messages in this format:.” Click the drop down menu and select HTML. Click Ok. Close Outlook, then reopen and test the setting.