Change quoting level in Outlook 2007

When replying to an HTML email, the original message has a blue bar to the left (which replaces the traditional > symbol). I've seen in previous versions of Outlook that pressing enter on this line takes you to a new line without the blue line ("paragraph unindent") and allows you to write a reply inline. That's fine and what I'd expect.

But currently that doesn't work and I can't easily get rid of the blue line, meaning all my inline replies look like they're part of the original message! Quite odd. Here's how to work around the problem:

• Change the message format from HTML to Rich-text
• Type Ctrl-Q where you want to add a reply
• Type your reply

Voila

(source)