To verify your settings are correct:

Outlook 2007
Go to Tools >> Email Tab >> Change...

Outlook XP /2003
Go to Tools >> Email Accounts >> View or change existing e-mail accounts.
Highlight your account you need to edit and click "change".

The very first screen you should come onto will look similar to the below:

You must make sure that Require logon using secure Password Authentication (SPA) is NOT checked

Click on more settings as show above

NOTE : If you do not use your domain name for your outgoing mail server, do not change the outgoing server settings!!!

You should see a window come up that says "Internet E-mail Settings"
Click the "Outgoing Server" tab
Make sure you have a check as show below for "My outgoing server (SMTP) requires authentication
Make sure only "Use same settings as my incoming mail server" is selected

Click the "Advanced" tab

Your incoming port MUST be 110
DO NOT check "This server requires an encrypted connection (SSL)

Your outgoing server port should be 25 OR if you use your domain for your outgoing server, 2525 ONLY
   If you do not use your domain for your outgoing server, refer to our ISP's documentation for their required settings, the port may be different

Make sure "Use the following type of encrypted connection" is set to none

Click ok and close or ok to close out of all your settings
Close Outlook and restart it (the application, not your computer).