Outlook 2003 RPC over HTTPS issues connecting to Exch 2010

I am having some difficulties with older Outlook 2003 (SP2) RPC over HTTPS clients connecting to my Exchange 2010 server.  I have no problems connecting to the same mailboxes using Outlook 2007 (via RPC over HTTPS).

The same Outlook 2003 RPC over HTTPS client can successfully connect to a mailbox on my old Exch 03 server.

I am in the middle of the "transition" and have the new Exch 2010 server running (with CAS, HT & MBS Roles on same server) along with the existing Exch 03 server.  Currently I have only migrated one or two users over before discovering this problem with the Outlook 03 clients in the field (not being able to connect to any mailboxes on the Exch 2010 server).  The Exch 2010 server is Internet Facing and I have done everything except migrate the OAB to the new server or setup any Send or Receive Connectors on the new Exch 2010 server.  I have also reset our firewall so that 80 & 443 go directly to my new Exch 10 server and setup a host entry on the new Exch 10 server so that the external Domain name resolves to the internal IP address of the Exch 10 server.

The funny thing is that the Outlook 03 RPC over HTTPS clients almost connects: the Directory connections actually make the connection to my old DC but the mailbox server https connection fails immediately.

I have a pretty simple setup - 03 AD with single Exchange 03 server sitting on the DC.  I installed the new Exch 10 server and was successful upgrading the AD and implementing the new server in the 03 Domain.

My only solution right now is to have my remote Outlook 03 (RPC over HTTPS) users that I migrate to the new Exch 10 server use OWA from their workstation until I get a chance to upgrade them to Outlook 07.

Anyone have any ideas on what I can check or where I went wrong in my setup?
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I'm sure you're aware of this.  What I ran into when we migrated to was how RPC authenticated.  We discovered that Exchange 2007 (I assume also Exchange 2010) would not authenticate with NTLM but required Basic instead.  When on NTLM, it would never fully connect.  I didn't like Basic, because it required the users to authenticate when connecting with RPC.  What I did to make the impact less painful for the user was to change the username format to be their email address rather than domain\username.

Anyway, hope that helps.
Make sure your Outlook 2003 clients have encryption enabled. Outlook 2003 has this disabled by default.

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e-Tec_SupportAuthor Commented:
Thanks for the responses however both items I have checked.  The RPC over HTTPS clients enable encryption by default (however I did double check it) and I do have Basic authentication enabled.
Not the HTTP proxy settings. Go to the Security tab in the More Settings. It's the top check mark box.
e-Tec_SupportAuthor Commented:
Thanks, that was it after all.  

Not sure how I missed that one because I fixed that same issue for our users in the office.  Boy I feel dumb!

Thanks again for following up.
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