I have had similar problems occur 3 or 4 times on both Outlook 2003 and 2007, even when upgrades were not involved. Somehow the settings in an email account will become corrupt in Outlook, and even if you check every value/name/port/encryption setting they will seem to be correct, yet you get an error. In cases like that I copy down (or printscreen) a working setup (including all the "more settings" screens), then delete the email account that is not working, and completely recreate it from scratch. That has solved the problem each time.