I know that there was a problem with the Tufte handout a few months ago but between being distracted by other matters and the recent loss of the mailing list I don't know what is happening at the moment.
I just did an upgrade to 1.6.6.1 and reinstalled Mixtex and I am getting some weird results with tufte outlne. If I have nothing but standard text in a document I get output in Yap. Add a title and Lyx bombs. And the same thing happens with Book (Tufte). It is not a serious matter at the moment, I just wanted to show someone how the handout would look but any current information would be appreciated. Thanks