How can I configure the Windows 7 firewall to prompt me on outbound traffic?

Try Windows 7 Firewall Control (the free version is good enough). This program is small, works with the Windows Firewall core - but is independent from the Windows Firewall application itself - and will ask you what to do. There is an annoying sound but this can be disabled.

I found that if you turn off the application, all new programs without firewall rules are blocked without notification.

It appears that the default Windows 7 firewall does not support a popup which asks you about outbound connections. The only reference I could find about asking on an outbound connection was people saying it can't be done.

ex. http://social.technet.microsoft.com/Forums/en-US/w7itprosecurity/thread/bef6e4a7-d43f-4c85-8229-e7be62d59517

If you want a firewall which does ask you every time there is a connection outbound there are a myriad of products which can do this, the most notable (as it's been around forever) is ZoneAlarm.

From a security perspective disabling all outbound traffic except for specific applications (IE, FF, antivirus, etc.) is a much better solution as once it's setup correctly you will rarely have to update it. If you install new programs frequently though this can be labor intensive and the gains not worth the time spent maintaining the list.

A much better program is Binisoft's Windows Firewall Control. Its 275kb - and has awesome functions like selecting an apps window to create a rule for example and is incredibly minimal and easy to use. Unlike that app up there which I tried, its ghastly and the free version doesn't allow system processes control.