Outlook 2007 Different POP3 and SMTP servers

What Anti-Virus software are you using?
Can you please uninstall it and reboot, then test sending again.
Does your email send happily?

can you please give me more details about your account configuration in outlook 2007.

Try experimenting with the following settings

On the advanced tab - use the following type of encrypted settings. try setting it to auto

On the advanced tab of your Internet account settings, you may need to set the type of encryption and port number for your SMTP server, your e-mail provider can give you this information.
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make sure you have :

Incoming mail server
Outgoing mail server

configured properly

and 'Require logon using secure password authentication (SPA) ' unchecked !

Thanks for the ideas but the settings have not changed from Outlook 2003 which was working properly.
1. Does not work with av uninstalled.
2. Accounts which use same server for POP3/SMTP work fine
3. Changing encryption method to auto results in same error.

The settings other than default are: "My outgoing server (SMTP) requires authentication" checked
"Logon Using " selected, Id and password supplied,  all else on page ckeared (including use SPA checkbox).  Advanced: Port 25 and no encryption selected.  Verified all settings and values with provider.

Can you use telnet to check the credentials you are using:

telnet to the server on port 25
try the following commands following the server banner
C lines indicate input from you,S lines indicate server responses.

You will need to encode the username and password. You ncan use the following link to do that.
http://base64-encoder-online.waraxe.us/

C: ehlo client.example.com
S: 250-esmtp.example.com
S: 250-PIPELINING
S: 250-8BITMIME
S: 250-SIZE 255555555
S: 250 AUTH LOGIN PLAIN CRAM-MD5
C: auth login
S: 334 VXNlcm5hbWU6
C: avlsdkfj  (Base v64 encoded username)
S: 334 UGFzc3dvcmQ6
C: lkajsdfvlj (base 64 encoded password)

Have you installed Office 2007 Service Pack 2 yet?
http://support.microsoft.com/kb/968774
Do you know what sort of server your outgoing server is?

'Require logon using secure password authentication (SPA) ' unchecked !

The telnet test is first indication of where the problem may lie.  By the way, in windows 7 you have to turn telnet on through Control Panel/Windows Features.  Bellsouth's response to "auth login" is "504 disabled authentication mechanism".  Am pursiing with Belllsouth (ATT)

Apologies I should have referred to wwo's comment 26179384 and not leeTutors comment 26602703 in my comment 2663901

Still not resolved with ATT but the suggestion led to a valid diagnosis.

Thanks!