First, go to Tools, Accounts, select that mail account, Properties, Servers.
Uncheck the box for "Log on using Secure Password Authentication."
If that was already unchecked, and you are sure you are you are entering
the correct username and password, one other cause for that error is
account corruption. As a possible quick fix, delete that corrupted
mail account, restart Windows Mail, then recreate that account.
If that doesn't fix it, more drastic measures will have to be taken.
Which antivirus are you running?
As a minimum, email scanning in the antivirus must be turned off,
although that may not be sufficient to eliminate all bad effects.
In a worst case scenario, your antivirus may need to be uninstalled.
If turning off the email scanning function does not resolve your problem,
consider upgrading to Windows Live Mail, because it is less prone to
suffering bad effects from overly aggressive antivirus programs.
http://get.live.com/wlmail/overview
Email scanning in any antivirus must be disabled, for reasons
explained here:
http://thundercloud.net/infoave/tutorials/email-scanning/index.htm