Links in Outlook: This operation has been canceled due to restrictions in effect on this computer. Please contact your system administrator.

If you get the following message when clicking links in Outlook:
"This operation has been canceled due to restrictions in effect on this computer. Please contact your system administrator."

This is caused by an incorrect or corrupted registry key:

HKEY_LOCAL_MACHINE\SOFTWARE\Classes\htmlfile\shell\open\command

The key should read:

"C:\Program Files\Internet Explorer\IEXPLORE.EXE\" -nohome

Or in the case of Windows XP x64:

"C:\Program Files (x86)\Internet Explorer\IEXPLORE.EXE\" -nohome