SMTP: problems with Outlook Only
 

first of all, I must get it out of the way.
I hate microsoft software.

Here is the issue:

At work, I have configured the smtp server on redhat 9.0
we can mail from the database as well as any other mail program I have come across.
When I try to mail from outlook, it gives me an error saying something like the following:
"smtp server ..... has rejected the following email address. error 550, invalid user."
I have made sure that it authenticates outgoing mail, i have tried downgrading to plain text passwords for testing purposes...

I can not figure out what the reason for that error coming up has to do with the email address or anything like that.

ALSO.... We have to use outlook.... boss's rule.

Am I just completely overlooking something simple?
or is this one of those freak mis-matched software issues?