Outlining is not writing a novel; it's preparation and organization of the elements of a novel. You need not outline to write a novel; plenty of writers don't. If you want to sell your novel, you will need a synopsis to show along with some chapters. Outlining allows you to write an a more effective synopsis.
What follows is how I outline. This may make things easier or jam you up. Use only what works for you.
The two novel elements that go into an outline are characters and plot. Like the nouns and verbs that go into making a sentence, characters and plot are the novel. Setting, motivation, timeline, story styling and whatever else you've got in mind aren't necessary right now; they're the adverbs, adjectives, conjunctions, etc. that you'll use to enhance the nouns and verbs. Put all that stuff to one side of your head; focus only on the group of characters that populate your story and what they do.
Characters: write a list of their names, and leave some line room to write beside each name. For each name, list assets, flaws, and the problems (I use no more than three of each) this character has. If you have trouble deciding, use a character outline sheet to get to know your character before you outline the novel, or read this workshop article Holly wrote on character creation.
My advice about characters: you should always know more about them than the reader will.
Once you've got your cast mapped out, look at them. Remember that interesting people are unique people. Could any of the characters swap places without a hitch? If yes, then you need to rework some of them. Can you see characters who are going to naturally like or dislike each other, no matter what your plans are? Note that; it will have an impact on how they relate to each other during the novel.
Plot: in simple language, write out the main plot of your novel. The way I do it is to list the five main events of the novel down the center of the page, and then on the side list what happens in between those five events. To give you a visual that doesn't involve my lousy handwriting, my plot list looks a bit like this.
If you're not sure how to plot, Holly has a great article on it here. My advice on plotting: have fun with it and you'll make it fun to write.
Once you have all the plot on paper, examine it the same way you did your characters. A very linear plot may make it easier for you to write the story, but the book is probably going to be predictable and dull for the reader. An extremely complicated plot, on the other hand, will make the novel hard for the reader to follow. You want a not-too-straight, not-too-kinky plot. Also, does the story plot serve the characters you've just outlined? If it's all about one of them and the other thirty-five are going to be sitting around and watching the one, then maybe you should rework the plot to better use that lovely cast you've just created.
Once you've nailed the characters and the plot, then you can get into making lists and outlines of the other elements like setting and motivation and what have you. This is story decorating to me and I'm not into it, so I write only what I absolutely need to flesh out the novel, usually in shorthand prompts that remind me of the main points.
When I'm done the outline, I'm ready to pitch.