The only way I know of to make Outlook work under linux would be wine, or something like that. Personally I've bought a copy of Crossover Office. Which means I can just install that, then use that to install the full version of Office 2k that I've got.
Erm, what distro? Well that's down to personal choice. If you've no linux experience per se, then a good place to start is mandrake.
I've got and idea that if you get a "boxed set" version, then I think I'm correct in saying that the powerpack has got crossover office with it.
I presume it should be possible to connect them both with samba - sorry, don't use that myself.
Partitions sizes. I'd say have a search here at LQ. the only actually thing that comes to mind is that swap partitions used to be twice the amount of physical ram (and yes my swap partition is 1.5 gigs i.e twice 768 megs).
Mandrake, along with SuSE, and quite a few others, will install all into the one partition - I just happen to have used the 3 partition method because I also have gentoo, which I couldn't manage to install into 1 partition - their default is swap, boot and root.
What else? erm one of the PIM app's that I can think of as quite popular, is Evolution - not sure if that would mean that you'd have to have gnome as your window manager or not. I understand it's not too difficult or confusing to install. As for linking to outlook? sorry, don't know.
Hopefully, this might help a little.
p.s. Just for info, I have heard of people, who have managed to detect all their hardware with knoppix, but when they've tried mandrake, they've had problems (and mandrake has a good rep for newbies, and quite reasonable hardware detetction) - you could actually install knoppix to your hard drive - just have a look at their forums
they are pretty informative - and it's actually quite easy as well.