Outlook has a spell checker so when you compose an email message and see a word that has a squggly red line underneath it, it's telling you the word isn't in its dictionary. You can right click on the word to choose alternate spellings, ignore the misspelled word, or add it to your custom dictionary.
If you've added a word to your custom dictionary by mistake, you can remove it by following these steps in Outlook 2007:
When you're working on a Word document and you want to look up a better word to use, double-click the word to mark it, and then press the Shift + F7 keys.