When I am composing an email, as soon as I try to attach a document by using the paperclip icon, Outlook freezes up.
I can still drag and drop attachements to attach though but why doesn't the paperclip icon work anymore?
Clicking on the paperclip icon to attach a file will bring up a file browser. When you have a network drive connected to a letter (for istance S:\ connects to a file server or to a drive of another computer on your network) and this location is currently not reachable, because the other computer is turned off or you are not connected to the same network, Windows could wait for a time-out before fully displaying the file browser.
Disconnect unreachable network drives
If this is the case you can try if disconnecting from that network drive speeds things up again. To do this open Explorer (for instance via Start-> Computer). Then in the Tools menu select Disconnect Network Drive. Note that in Windows Vista and Windows 7 by default the Tools menu is hidden. Press the ALT key to make it visible.
Reset Internet Explorer History
If that doesn't speed things up you can delete your Internet Explorer History. Aside from keeping a history of URLs, it will also keep an history of typed network and FTP locations. Under certain circumstances, this will also be directly linked to your Explorer and could cause it to wait for a time-out first as well.
To clear your Internet Explorer History go to Control Panel-> Internet Options. On the General tab you can empty your browsing history.
Unreachable network drives can cause long time-out delays in Office.