Auto capitalization in Outlook 2007

I have auto cap at the beginning of a sentence turned on. It works, most of
the time> Even when I do spellcheck the beginning lower case word is not
picked up. I have noticed no pattern of when it works properly or inproperly.
Is this a bug or am I not doing something correctly. I have noticed that it
works properly on first sentence in paragraph, not on the next sentences but
work again on the following sentences.

I am using Outlook 2007 with Word 2007 but on XP. I still have Office 2002
installed.

Any help would be appreciated.

Thanks