The spell checker in OE is so annoying - till you know how to fix it.
Outlook Express does not have a spell checker. It can make use of the spell checker in Microsoft Office 95 or later, or Microsoft Works (later versions, which include Microsoft Word) if present. However, a system file that is required in order to make use of the spell checker is not installed by Windows XP.
The easy way would be to install Microsoft works or Word from any office version.
Or you could download and run This file
to put csapi3t1.dll into C:\Program Files\Common Files\Microsoft Shared\Proof