i have setup my exim mail server and everything works fine (i can check mail locally with mail command) ... except.... im trying to use balsa to connect to my server (localhost) and it gives me this error "POP3 mailbox localhost error: No authentication method available" what does this mean?

this is not related to exim. exim is an SMTP server only, it is not it's problem to let mail clients access the mail it accepted. I assume balsa is trying to connect to a pop3 server when you are not actaully running one.

then what would you reccomend to access via pop3?

i don't know really, i only ever use imap servers, which i use courier for. I'll say though that the server you chose will need to be designed to fit in with the mail storage architecture you are using. For example courier-imap (which may very very well provide pop3 too, i never looked) is designed primarily for Maildirs, as is dovecot. wu-imap and others are designed for older more generic mbox mail files... so ensure that you are providing a seamless transition between your SMTP solution to the server and pop3 / imap out of the server.