If you are certain that you are entering the correct username and
password, this problem is often a result of account corruption caused
by running a non-compatible antivirus. Windows Mail is not compatible
with most McAfee and Norton security programs. Those will need to
be uninstalled, not just disabled.
After uninstalling your non-compatible antivirus, download
and install a more compatible antivirus like the free Avast:
http://www.avast.com/eng/avast_4_home.html
Even compatible antivirus programs will need to have their
email scanning option turned off. For more on this topic see
http://www.oehelp.com/OETips.aspx#3
If after doing the above, the problem remains, delete that
corrupted email account, restart Windows Mail, then recreate
the account.
