I appreciate all your help, but I found a solution that WORKED:
Open IE, click on Tools, click on Internet Options, click on Programs, click on Associate a File (or in Vista, click on Set Programs), scroll to PDF and highlight it, then click on Change Program. A list of Readers will appear, so I selected Adobe Reader.
In my case, even though the Add-on was there and so was the Conversion Pack, Microsoft Office 2007 was defaulted as the reader,and it would not change just because I had downloaded Adobe Reader. Once I changed the settings using the instructions above, it worked as it should. Now I am able to open all PDF files that were sent as attachments through Outlook 2007.
Again, thanks for your help.