To be honest, I don't know what actually occurs wrong when Windows ME is upgraded with Windows 2000, all I know is what I read on the MS website...they say it's a no-no.
FYI, there's no such thing as Outlook 5.01. Outlook is part of the MS Office suite of applications. The versions are 97, 98, 2000, 2002, and 2003. You must be referring to Outlook Express which is part of Internet Explorer installed with the OS. Windows 2000 by default, installs IE version 5.01, so I'm sure that's what you're referring to.
If you're interested in difference between these apps, see this article:
Differences Between Outlook and Outlook Express
http://support.microsoft.com/default.aspx?scid=kb;EN-US;257824
Now, back to your original problem.
First, if the OS is stable, there's no need to reinstall it.
If you're looking for the location of your OE mail folders, see this website for info regarding the how and where OE stores your messages, address book and settings:
Inside Outlook Express
http://insideoe.tomsterdam.com/
The location of the OE stores is completely different between WinME and Win2K and you probably had a later version of OE in WinME. If so, then the update routine may have ignored the newer (unknown) version. If that's the case, I'd suggest updating both IE and OE to version 6, and then you'll probably be able to import you old mail and address book (if it's still there).
The referenced website also has good info regarding backup procedure, in case you decide to scrub everything and do a clean install of Win2K. Be sure to update IE to version 6 also.