If you set Outlook up to convert to plain text, you get normal '>' style quoting when you reply. It also has the advantage that anyone replying to your mail sends in plain text by default as well.
http://support.microsoft.com/kb/831607
That's not an advantage. We've lost the "email should be short plain text" war, and we have to deal with real email which is coloured, formatted, fonted, has images and attachments and signatures and so on.
Auto-switching email like that to plain text makes it difficult to read, screws up the layout, and loses information entirely.
Each to their own, I suppose.
I mail a _lot_ of copy-pasta from shell output, so not having to switch to plaintext manually saves time. To be honest the sort of mail that's multicoloured / multifont / etc. generally isn't worth reading, let alone replying to; but that's just my experience.
Is this still true for newer versions? Crap, people have been complaining about this for so long, you'd think they would have fixed it by now.
Switching to text format is not a solution. There can be good reasons to use different fonts and layouts in an email (for example to format code or diagnostic output differently from the text, or to highlight things..).
Outlook also forces the user to type above the previous email because of it's non-existent quoting support...