Problem with Outlook 2007 SP2 accessing Exchange 2003

After installing Microsoft Office 2007 Service Pack 2, Outlook 2007 is not able to access Exchange 2003 SP2 in our environment. We get an error saying......

"Outlook cannot log on. Verify you are connected to the network and are using the proper server and mailbox name. The connection to Microsoft Exchange is unavailable. Outlook must be online or connected to complete this action"

Server is getting pinged by name and by IP and we can connect outlook web access from our systems but cannot access Exchange 2003, any idea what might be wrong??

I was running in to same issue earlier i simply removed network cable, rebooted my system, logged in again, connected network cable and ran Outlook. I did not got same error after that, just give it a try and let me know if it is helping you as well.

I am not aware of above solution but while checking out for this issue i came across below knowledge base article.
Error message when you create a profile in Outlook 2007 after you install the cumulative update that is described in Microsoft Knowledge Base article 961752: "Outlook cannot log on"
Just try out the solution that has been mentioned there for fixing this error check out if that's helping.

I was able to get it working doing this.

Control Panel > Mail > E-mail Accounts > Select "Microsoft Exchange" and than select "change" > More settings > Security > Logon network security and change to "Password Authentication (NTLM).

I had the same issue when SP2 was applied i couldnt attach to our exchange server. You need to make sure that not only can you ping and connect to your exchange server but also your global catalog server too. If your using a hosts file at the end of a vpn then i suggest adding an entry for your gc server.

see this kb article

http://support.microsoft.com/kb/969519/