Enable virtual keyboard and verify the issue. Check the link below to enable virtual keyboard.
http://www.microsoft.com/windowsxp/using/accessibility/oskturnonuse.mspx
Check in application safe:
Hold Ctrl key and click on Outlook icon to open in safe mode and try to check, typing the letters and if you are able to type without
any issues, disable add-ins and verify the status.
If the issue occurs in safe mode, create new
profile for Outlook and check.