I'd read that same MS Blog post re: ML compatibility to office 2011 for Mac. That gave me comfort to proceed with the upgrade. Still - Outlook runs poorly (see above post) and Excel has some copy/paste issues too. If you aren't a power office for mac user then may not feel quite the same, but if you are in a corporate environment and linked to Exchange, or sharing many Excel files, then I'd still caution.
REVISION: So, I'm back to a useful outlook again and was able to salvage all saved mail from "on my computer" folders. Essentially, (a) used Time Machine back up to complete re-image using a former system backup and reverted back to Lion. Then, (b) used an even older Time Machine backup from pre-APRIL to essentially revert back to pre-MS Office SP2 upgrade. Basically, I went back to MS office 14.1.4.
The combination of these two events then permitted me to successfully rebuild the Outlook database. Once that was done, then it was a matter of backing up those folders using the export utility, then syncing back to MS Exchange to get current again. Then, I updated MS Office with the latest SP2 patches.
So, the result was my system is now back to OS Lion. Can't really explain the why's, but the above process did allow me to recover years worth of saved mail.
Lastly, yes, my Outlook is running, searching, scrolling, and generally operating like a charm once again.