outlook will not connect to exchange server, but other email clients will

I have a unique problem, I cannot connect to exchange running on server 2003 with outlook 2003.
When I add new email account and go to test, it will not connect to pop, but will send the test smtp message. I used another client (Incredimail) and have no problems what so ever.
username and password are correct.
Anyone have an answer to this mystery?