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outlook 2007 is not working with brand new sbs 2008 migrated server

hi
i have migrated sbs 2008 from sbs 2003 now i am expierencing some very unusual behaviour from different users in my network not all users logged on to the domain they are using their laptops and exchange is setup on them when they are not logged into the domain then the outlook doesnt work it keeps on asking for the password
what should i do i have selected different authentication method currently i am using NTLM when i setup funny thing is it works on two computers which are not logged in using domain even though i have deleted the profile and recreated it still it doesn't work
this is the event i believe associated with the outlook.
what should i do what authentication method should i use i practically feel really angry at microsoft due to this stupid way of providing new product
An account failed to log on.

Subject:
	Security ID:		NULL SID
	Account Name:		-
	Account Domain:		-
	Logon ID:		0x0

Logon Type:			3

Account For Which Logon Failed:
	Security ID:		NULL SID
	Account Name:		udi
	Account Domain:		SERVER1

Failure Information:
	Failure Reason:		Unknown user name or bad password.
	Status:			0xc000006d
	Sub Status:		0xc0000064

Process Information:
	Caller Process ID:	0x0
	Caller Process Name:	-

Network Information:
	Workstation Name:	UDI-PC
	Source Network Address:	10.10.100.35
	Source Port:		56062

Detailed Authentication Information:
	Logon Process:		NtLmSsp 
	Authentication Package:	NTLM
	Transited Services:	-
	Package Name (NTLM only):	-
	Key Length:		0

This event is generated when a logon request fails. It is generated on the computer where access was attempted.

The Subject fields indicate the account on the local system which requested the logon. This is most commonly a service such as the Server service, or a local process such as Winlogon.exe or Services.exe.

The Logon Type field indicates the kind of logon that was requested. The most common types are 2 (interactive) and 3 (network).

The Process Information fields indicate which account and process on the system requested the logon.

The Network Information fields indicate where a remote logon request originated. Workstation name is not always available and may be left blank in some cases.

The authentication information fields provide detailed information about this specific logon request.
	- Transited services indicate which intermediate services have participated in this logon request.
	- Package name indicates which sub-protocol was used among the NTLM protocols.
	- Key length indicates the length of the generated session key. This will be 0 if no session key was requested.

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An account failed to log on.

Subject:
	Security ID:		NULL SID
	Account Name:		-
	Account Domain:		-
	Logon ID:		0x0

Logon Type:			3

Account For Which Logon Failed:
	Security ID:		NULL SID
	Account Name:		udi
	Account Domain:		SERVER1

Failure Information:
	Failure Reason:		Unknown user name or bad password.
	Status:			0xc000006d
	Sub Status:		0xc0000064

Process Information:
	Caller Process ID:	0x0
	Caller Process Name:	-

Network Information:
	Workstation Name:	UDI-PC
	Source Network Address:	10.10.100.35
	Source Port:		56062

Detailed Authentication Information:
	Logon Process:		NtLmSsp 
	Authentication Package:	NTLM
	Transited Services:	-
	Package Name (NTLM only):	-
	Key Length:		0

This event is generated when a logon request fails. It is generated on the computer where access was attempted.

The Subject fields indicate the account on the local system which requested the logon. This is most commonly a service such as the Server service, or a local process such as Winlogon.exe or Services.exe.

The Logon Type field indicates the kind of logon that was requested. The most common types are 2 (interactive) and 3 (network).

The Process Information fields indicate which account and process on the system requested the logon.

The Network Information fields indicate where a remote logon request originated. Workstation name is not always available and may be left blank in some cases.

The authentication information fields provide detailed information about this specific logon request.
	- Transited services indicate which intermediate services have participated in this logon request.
	- Package name indicates which sub-protocol was used among the NTLM protocols.
	- Key length indicates the length of the generated session key. This will be 0 if no session key was requested.

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ASKER

mydomain correspond to my company name


[PS] C:\Windows\System32>get-autodiscovervirtualdirectory | fl


Name                          : Autodiscover (SBS Web Applications)
InternalAuthenticationMethods : {Basic, Ntlm, WindowsIntegrated}
ExternalAuthenticationMethods : {Basic, Ntlm, WindowsIntegrated}
BasicAuthentication           : True
DigestAuthentication          : False
WindowsAuthentication         : True
MetabasePath                  : IIS://SERVER1.Mydomain.local/W3SVC/3/ROOT/Autodisco
                                ver
Path                          : C:\Program Files\Microsoft\Exchange Server\Clie
                                ntAccess\Autodiscover
Server                        : SERVER1
InternalUrl                   : https://sites/Autodiscover/Autodiscover.xml
ExternalUrl                   :
AdminDisplayName              :
ExchangeVersion               : 0.1 (8.0.535.0)
DistinguishedName             : CN=Autodiscover (SBS Web Applications),CN=HTTP,
                                CN=Protocols,CN=SERVER1,CN=Servers,CN=Exchange
                                Administrative Group (FYDIBOHF23SPDLT),CN=Admin
                                istrative Groups,CN=MYDOMAIN,CN=Microsoft Exchange,
                                CN=Services,CN=Configuration,DC=Mydomain,DC=local
Identity                      : SERVER1\Autodiscover (SBS Web Applications)
Guid                          : f301a850-fb78-4e55-8158-c0f58704510e
ObjectCategory                : Mydomain.local/Configuration/Schema/ms-Exch-Auto-Di
                                scover-Virtual-Directory
ObjectClass                   : {top, msExchVirtualDirectory, msExchAutoDiscove
                                rVirtualDirectory}
WhenChanged                   : 05/08/2010 13:02:18
WhenCreated                   : 05/08/2010 13:02:18
OriginatingServer             : SERVER1.Mydomain.local
IsValid                       : True



[PS] C:\Windows\System32>
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i have applied the smtp address for mail and that's i am able to get emails from external sources
funny thing is its working on two stations and failing on others
what OS are they running @ failing stations ?
vista / Win7 ?

What os are the successful stations running
the failing stations are win 7 and windows vista
the stations which are passing are windows 7 so really there is no unique thing about them
i have tried the above kb dont work
Did you restart the workstation after applying the above kb.

registry changes require a restart.
ya
thanks guys i have sorted it out