I am seeing this strange behaviour with Windows 7 and Outlook 2010.
If I change the password of User1 (Admin user), login, and start Outlook, it asks for a password. It keeps saying "password incorrect". I can login by using same password on the OWA webclient.
If I change User1's password back to what it was before, Outlook starts without any prompting and I'm able to send and receive emails.
Is there any link between the user account, its password and the PST file's password?