What is the type of email account configured in Outlook?(Is it POP/Imap/Exchange or connector acount)
Check if you are able to receive mails on your Web server.
If it you are able to receive mails on the server, remove and re-add the email account and check the result.
You may also check the below article:
http://support.microsoft.com/kb/329936 (Applies to Office 2007 as well)
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