Hi MartiniGirl,
This behavior occurs due to the following two causes.
If SSL is unchecked in the Windows Mail Properties, then this issue occurs. If you've already enabled SSL and you still can't send e-mails, your ISP might be blocking the port that you are using for the outgoing server. If this is the case, try 25 or 587 by going into Windows Mail Properties and then clicking on Advanced Tab.
Outgoing Mail SMTP: 25
An invalid server name also causes this error. It should be pop3.live.com for the incoming server while smtp.live.com for outgoing.
In the Windows Mail properties window, click on Server Tab and type the following in the boxes beside Incoming Mail (POP3) and Outgoing Mail (SMTP).
Incoming Mail (POP3): pop3.live.com
Outgoing Mail (SMTP): smtp.live.com
Once you’ve done the following changes, click on apply. Now open Windows Mail and try to send messages.
Also, like Palcouk said you need to check the option Log on using Secure Password Authentication in the logon information.
Here is how you do it.
1. Under Logon Information, click Log on using.
2. In the Account name box, type you Windows Mail Member ID (everything before the at sign (@) of your Windows Mail address).
3. In the Password box, type your Windows Mail account password.
4. Click to select the Log on using Secure Password Authentication check box.
5. Click OK to close the Outgoing Mail Server dialog box.
6. Click OK to close the <Mail Account> Properties dialog box.
7. Click Close.
Post your results back.
Mouneshwar R – Microsoft Support
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