Recently when I upgraded from outlook 2003 to outlook 2007 at work place (as part of Windows 7 upgradation - I know its too late to go with Win7, we cant help it as we have to adhere to corporate standards but not yet personal laptop :)), I am not able to make the existing pst file as the default for downloading the emails to local pst.
Following are the steps to change the default data file
1. Open Outlook Client -> File Menu -> Data File Management...
Before this step I added the existing outlook 2003 pst file using File Menu -> Open -> Outlook Data File (browse to the existing pst file).
2. Select the respective file in the data files popup window and click on "Set as Default" button.
When we select this option, it promts us to create a new outlook data file or disable the offline folder before setting as default data file.
Now to disable the offline use we can with the steps provided at the msdn article @
Now in the last step you will come to know that the "Disable Offline Use" button is always disable with out allowing us to change.
Basicalling this complete issue happens when your pst file is in the "Outlook 97-2002 Personal Folders File" format. The easiest work arond for this problem is by creating a new pst file in Outlook Client 2007 and import the content from the existing pst file. It took around 10 mins for 1.5 GB pst file.
After importing you can make it as a default data file for downloading the emails to local pst file.