Outlook XP prompts for password

Environment consists of a Windows 2000 Domain with Exchange 2000. Desktop
clients are Windows XP and Office XP.
I have 1 domain user (account) who is able to authenticate to the Domain and
browse the network, shares etc..according to set ACL's.
Recently, however, when he opens Outlook, he is prompted for a username,
password and domain. When we enter the correct domain information, it is
rejected.
I went as far as deleting his local profile, disjoining and rejoining the
machine to the domain and reinstalling office but no fix.
We have a Terminal Server setup for users to access email when on a
none-member machine/or on the road. He is able to log on and open outlook
just fine on that machine.
Is this an Exchange issue, Outlook issue?

Any help is appreciated.

Sean