Cannot create file: xxx.xls. Right-click the folder you want to create the file in, and then click properties on the shortcut menu to check...

One of my user received this error when trying to open an excel attachment in Outlook 2007 sent from Supervisor "Cannot create file: xxx.xls. Right-click the folder you want to create the file in, and then click properties on the shortcut menu to check your permission for the folder."

To resolve this problem, it is suggested that you need to delete all the temporary files in the temporary internet file folder.

Here's the info extract from Microsoft on how to locate the temporary internet file folder in your computer:

When Outlook 2003 or Outlook 2007 first tries to use a temporary file, it examines the registry to determine whether the following value exists, depending on your version of Outlook.

Outlook 2003
HKEY_CURRENT_USER\Software\Microsoft\Office\11.0\Outlook\Security

Value Name: OutlookSecureTempFolder
Data Type: REG_SZ
Outlook 2007
HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\Outlook\Security

Value Name: OutlookSecureTempFolder
Data Type: REG_SZ
If the value exists, and if the value contains a valid path, Outlook 2003 or Outlook 2007 uses that location for its temporary files.

If the registry value does not exist, or if it points to an invalid location, Outlook 2003 or Outlook 2007 creates a new subdirectory under the Temporary Internet Files directory and puts the temporary file in the new subdirectory. The name of the new subdirectory is unknown, is randomly generated, and takes on the following form, depending on your version of Outlook.

Outlook 2003
C:\Documents and Settings\username\Local Settings\Temporary Internet Files\OLKxxx
In this example, username is the user name that is used by the person who is currently logged on to the computer, and xxx is a randomly generated sequence of letters and numbers.

Outlook 2007
C:\Documents and Settings\username\Local Settings\Temporary Internet Files\xxxxxxxx

Note In Windows Vista, the temporary file resides in the following location:
C:\Users\username\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\xxxxxxxx