No, he meant he wanted Office to use WebKit instead of Trident (IE's engine) or 'Microsoft Word' (the rich-text editing framework that it uses currently).
Making Outlook use Word as the default rendering engine was a pretty huge effort back in Office 2007. There was some underlying work that happened in this time frame that also led to Word Services in Office 2010.
The reason why Office made the switch to using Word as the default (and not even allowing Trident as an option) was to unify the layout results between authoring and reading emails. A common complaint "back in the day" was that users would write emails and they would end up looking different, since IE and Word render things differently.
While Word will read and render HTML, making it a standards-compliant rendering engine was and is not a priority (HTML is a convenient storage format that happens to also be rendered by other programs). So, the decision was made to make Word the default email renderer, and cut Trident from Outlook as an email renderer.
(I work on Word, but I don't and have never directly worked on wordmail, but I've heard this explained in hallways over the past few years when I complain that Word doesn't render animated gifs, I am not an official MS representative, etc. etc. etc.).
It's not a priority compared to WYSIWYG results between composing/reading mails.
The flip side of the coin is fixing HTML rendering in Word such that we can pass Acid tests, but considering the sort of mail people send, what sort of tasks Word is used for, and the fact that a working renderer is a mouse-click away, and you can see that it's just not cost-effective to take on this work.
I guess the third side of that coin is to take out Word and use something else as an email composer, but that would break all sorts of things I can't even begin to think about and is even harder than making Word a great HTML renderer (which I think is completely doable, but again, not ultimately worth it).
I'm also not on the Outlook team, so they likely have a different perspective than I on this topic, but that's how I see things.
I don't understand how composing results can be more important - who sends e-mail to themselves? I guess MS is willing to sacrifice general compatibility for it's business clients who use Outlook internally.
Word being added to the mix in the first place only reinforces that.
