Getting reports that this patch is also may be causing issues with password prompting..
Should we open a case?
"If you have all of the following conditions, you will get a password prompt periodically from outlook.
* You have enabled Outlook Anywhere
* Outlook Anywhere is configured to use basic authentication (not NTLM)
* You are running Outlook 2007
* Update 2412171v2 released January 9th, 2011 has been installed
Note that this causes a password prompt even if the client is domain joined and outlook is usint TCP connections. Something in that update causes outlook to still attempt an HTTPS connection (temporarily) and a password prompt occurs.
I have found that changing Outlook Anywhere to NTLM authentication fixes the issue, but this is undesireable in many cases due to firewall configurations that may not support passing through NTLM authentication, or if ou are using forms-based authentication on TMG/ISA to prevent direct CAS access.
Uninstalling 2412171 also resolves the issue, but again, not ideal to be uninstalling performance-improving updates. The previous version of 2412171 also does not cause the issue.
Since the newer version was released January 9th, I *suspect* this is the cause (the timing of this article does not seem to be coincidence)"