I did set up a new profile like you instructed. Both the old and new profiles show the continued passwd pop-up.
1. There is no difference in my Outlook setup vs the other computers/users (I set them all up)
2. Same OS Win XP Home
3. Same installation of Outlook
4. The only difference in programs installed is that I have ActiveSync. This issue did start before ActiveSync was installed. I tried disabling ActiveSync but the OS starts it up any way.
Any other thoughts?