Outlook: Outlook Signature is corrupted

Symptoms:
Any text that is not bold would turn out bold when creating a new email, and visa versa.

The following steps did not resolve the issue:
Creating a new Outlook profile or creating a new signature.

Outlook can be configured to use Word as the text editor for new emails. This means that the normal.dot configuration will apply to these emails. If the signature is doing something funny when you go to create a new text file, it will most likely be an issue with this file.

Resolution:
Close all office programs. Rename normal.dot which for Outlook 2003/Windows XP is under the user profile under Application Settings\Microsoft\Templates. Start Outlook again and create a new email. The issue should now be resolved.

Note: This may cause a Word instance to appear in the background. Close Outlook, start Word, close Word, start Outlook. This has resolved this issue.