If you try to open a .eml file in Outlook 2007, it will create a new message containing the .eml file as an attachment.

In order to read .eml files from Outlook 2007, you need to pass the /eml argument to outlook.exe . This Microsoft kb article describes how to tweak the windows registry to accomplish this.

Essentially you need to edit the HKEY_CLASSES_ROOT/Microsoft Internet Mail Messageshellopencommand default value to :
“%ProgramFiles%Microsoft OfficeOffice12OUTLOOK.EXE” /eml “%1”

To revert back to using Outlook Express, set the value of the same key to:
“%ProgramFiles%Outlook Expressmsimn.exe” /eml:%1