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Found another way round that doesn't require a new profile. From within Outlook go to File > Account Settings > Double click the email account > More Settings > Security

 

It seems those with the issue have Negotiate Authentication. Change to Anonymous and it works fine again.

 

[ATTACH=CONFIG]25516[/ATTACH]

 

Yep that fixes it but it does require SP2, thanks!

 

Still waiting for an explanation from Microsoft why it happened!

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