Hi!
I have been fighting this problem for over a month. I've just read the whole thread here and have also read threads on other support forums. I've tried every solution offers - uninstalled and reinstalled all Live essentials, reinstalled only Live Mail, disabled various add ins to my Outlook 2010 software, changed Automatic Sign in to Automatic Delayed and Manual, tried to update the Sign In Assistant only mine is newer than the link provided here. Nothing has resolved the issue.
It's down to you Microsoft. As we say in England "get your finger out" and fix the problem!
Nick