Look if http://www.google.com/search?q=Outlook+%22An+application+is+requesting+access+to+a+Protected+item.%22 gives any clues.
While I am running Outlook 2007 (OS=Windows XP), a message box appears in the middle of my screen saying "An application is requesting access to a Protected item." It asks for a password and to click okay. I can click on "details" and find the path and file name for which access is being requested, in this instance Outlook. I have been running Office 2007 for quite some time and this occurrence has just been recently.
If I click on "cancel" the box disappears for a while before returning. In the meantime, Outlook runs just fine.
Any idea what might be causing this problem?