This is a weird issue that just started a few days ago with no changes to the server at all. The only change is a new user with Outlook 2010 was setup to use Outlook anywhere.
SBS 2008 - Exchange 2007 - IIS 7.0
When the issue occurs, OWA works fine internally and externally, Outlook/Mac Mail clients prompt for a password but nothing seems to work. After an IIS Reset it all works for a number of hours.
Forms based authentication and Basic Authentication are both turned on.
This server is a DC and Exchange svr and has worked flawlessly for a year or so until now.