I was trying to configure the CRM Client for Outlook by adding an organization and I ran into this error.
Now I had just deployed my customizations and I was able to access CRM using IE from the same client and could see all my customizations. I didn't get any errors when importing or publishing the customizations.
What I tried was to create a brand new organization with no customizations and I was able to add that organization to the Outlook client without problems. So the issue was that there was something in the customizations that was causing an error only in the Outlook client. After several days of effort we tracked it down to a site map customization.
We had added a custom section under Workplace that had some links to a particular view of the Account entity. BAD IDEA. That won't work in the Outlook client. After removing the link I was able to connect to my organization without this error.
Some things you find out the hard way.