The following procedure solves the problem with drafts folder that shows emails in clear text.
Apparently the problem regards to a corrupted security settings or forced change in those settings.
1.Go to ‘Drafts’ folder.
2.Right Click one of the emails < click ‘Message options’
3.Change ‘Attachment format’ from ‘default’ to ‘Mime’ to see if the signature is presenting OK now.
4.If the signature is OK go to section 5, otherwise reinstall Office 2007 and update windows and office with the latest updates.
5.In Outlook main screen go to ‘Tools’ < ‘Macro’ < ‘Security’.
6.Go to ’email security’ < try to enable or disable the ‘Send clear text sign message’ and see if it solved the problem (by default it should be enabled – but try both options).
7.If section 6 didn’t work – try to enable and disable the ‘Request S\Mime receipt’ option.
8.If section 7 didn’t work –go to ‘Automatic download’ on the ‘Trust center’ window < make sure that the ‘don’t download picture automatically in HTML’ is unchecked.
9.If any of the above didn’t work – reinstall Office 2007 (explained on section 4).