All users with windows 7 and office 2010 are unable to connect exchange online with outlook. It constantly asks for password although the password is correct. Also when trying to create new Outlook profile the AD account gets lock.
The problems seems to be that the AD usernames are the same as exchange online users (AD UPN is the same as the e-mail domain)
I have added another UPN and Associated it to the users, but no change.
I have ran the office 365 desktop prepare utility on all work stations.
I have also tried the following:
http://support.microsoft.com/kb/2598374
and,
[HKEY_CURRENT_USER\Software\Microsoft\Office\14.0\Outlook\Security]
"DisableWebAuthenticationType"=dword:00000010