As our esteemed Mr. Konrath points out there are different ways to outline and not everybody's way meets everbody else's needs.
In school, we're taught a very meticulous, detailed, and inflexible style for outlining. You end up with,
The style is extremely rigid and, as I said, relatively inflexible as it was designed to analyze a story not design one.
Nevertheless, that methodology can work for some people and if it works for you, I'm all for it.
It is, I believe, one of the reasons why so many people hate and despise outlining so much.
However, there's another style of outlining that essentially uses the same methodology, but refrains from the rigidity and inflexibility of the formal style and that's the 3x5 index card method. Essentially, this method is a series of notes placed on 3x5 index cards which provide you with an expandable and easily reformattable style of outlining while still allowing you to provide yourself with a roadmap.
Uncle Jim explains it here...
Notice that the system is essentially a collection of short notes regarding your chapters, scenes, characters, etc., etc. You are not confined to using a specific numbering system and if you want to move scene 23.4 from chapter 23 and put it back in chapter 22 as scene 22.8, you're free to do so. Your characters, scenes, special notes to yourself, chapter excerpts, and more can all be added to the system at any time and the stack is essentially infinitely expandable.
It's also organized so that if you drop the file folder or box or stack of your cards it's easily reorganized unlike a folder full of notes or a raft of Post-Its and loose-leaf pages.
It's also enjoyable in that you're not stuck in a confined space doing a confined method-outline. You can mix and match virtually at will, insert new characters and scenes, etc, etc simply by adding or subtracting a new card.
You can even color code and index everything if that's what floats your boat, but the method will ultimately provide you with the roadmap you're going to need to finish a long work especially.
I've used techniques as simple as writing 1-sentence notes for the 3 major scenes I wanted to use in each chapter and as complex as the one Joe used for Bloody Mary. My first novel's first draft was essentially a 65k word outline of what my 7th draft turned out to be.
And there's another method - consider your 1st draft to be your outline for your work. You know it still needs work and the hard part is done once you've finished that 1st draft. Now you have the road map you need to really work the words and the story and find the real place you're trying to go with the story.
You can view Joe Konrath's outline for Bloody Mary at http://www.jakonrath.com/bloodyoutline.rtf