This is usually caused by ISP blocking outgoing port 25 or modem or Firewall problem.
Ensure that you have configured your email client as per instructions provided at Support Flash Tutorials (www.trafficpullz.com > Support > Flash Tutorials)
There are two solutions for this, the first, and best, is to ISPs smtp servers, and second is to use /webmail option when this error comes.
You can read more at http://support.microsoft.com/?kbid=813514
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