Microsoft has information regarding that error along with fixes.
http://support.microsoft.com/kb/2483175
One other solution I found is:
Goto Tools,
Then Goto Account settings,
Select E-mail Tab,
Select your account,
Then click on Repair,
Click Next,
In Internet E-mail Settings,
Select More Settings,
In Outgoing Server tab deselect all the check boxes or provide correct user name and password.
Then click OK,
Then click Next,
Finally click Finish.