I was sending mail through Outlook 11 on my me.com account without any problems until last week. I didn't change any settings, but I am now getting the following error message:

The server for account "Me" returned the error "5.7.8 Bad username or password (Authentication failed).." Your username/password or security settings may be incorrect. Would you like to try re-entering your password?

It can't be a username/password problem as I receive mail just fine.

Mail is sending from this account on my phone without any problems. I've also tried creating the account in mail and it sends from there with no problems either.