I started using treepad recently, works a tree-t (uh...sorry...).
Seriously though, in terms of outlines one of the fics I'm working on (and I use that term loosely considering I've done very little on it for months) started life as a brief outline - literally one-line descriptions...by the time I got to part 6 or 7 it had ended up being 3 or 4 lines...by the time I got to ten we were talking paragraphs...so I went back and added detail into the first few chapters to kinda 'make up the detail' to match the rest of the plan/outline/whatever you want to call it...and inevitably, the same happened again, and I went back and added even more detail...and so on...
And now pretty much the only thing I'm missing is some more descriptive writing and the dialogue itself. The rest of the fic has sort of written itself.
HOWEVER...I do find this type of writing to be less fun than just starting with one sentence and seeing where you end up (which is what I'm doing with 'Alpha Plus'). There's no plan there, so it kinda forces you to be creative in digging your way out of holes that you've dug yourself, which can have quite interesting results...however, sometimes it backfires and you find you've completely painted yourself into a corner and have nowhere to go, whereupon you start to lose some interest.
I think it depends on how seriously you are approaching the fic. E.g. my 'big' fic that I'm working on is pretty well planned out, but my sort of 'fun, have a quick blast and see what happens' fic [Alpha Plus] has no planning, but has got a hell of a lot more done in the same amount of time.
So I think it's very possible to do it either way, but it's horses for courses - some things will work better for some people than other things.
Equally, for me Treepad is great because my brain works that way - it likes heirarchies (sp?). It likes clicking a '+' symbol to get more detail, whereas it finds a big bunch of (non-bullet-pointed) text with lots of ideas difficult to deal with. I'm a list person more than a paragraph person (which is why I was infinitely better at Business Studies in school than I ever was at English), but a lot of other people work the opposite way - some people find bullet points too vague or too constricting for their creative flow.
As for whether I stick to them...well, that's a different story altogether. When I started connections, that was half-outlined, half-blagged - I kinda changed the outline a LOT as I went along, and then realised it was now going nowhere and I couldn't remember much about the original idea, so I lost interest and the whole thing ground to a halt. The bits that I stuck to were useful though - and it was great to have something to refer back to when writing the later stuff; just finishing a chapter, then reading quickly through the outline and realising 'oh, I can't do that because of this that happened earlier...' or 'damn, I'd forgotten about that!' etc etc - a lot easier than reading your whole damn fic again!
So pick whatever suits you best

Try both, and see what happens. I tried just writing paragraphs of stuff, and eventually found myself separating them out into sentences...then cutting the sentences down to the key points...then adding bullets...and finally ended up with a list of events rather than a flowing paragraph. But that's just me.
Have I been of any use in posting this? Possibly not, but hopefully someone will find it interesting at least.