Permission tag is inactive for Outlook 2007

Hi,

I have set up a Test RMS server  SP2 on a test Domain controller along with 
exchange server 2003. Then created a VM machine to be on the same domain. 
Installed office 2007/2003, RMS SP2 Client. (Tried with both) but the 
permission tag remains disabled all the time.

Please fine attached the Outlook file from IRMCheck.exe.

Anyone any idea what might the problem be?

Regards,
Huzaifa