'Connection to Exchange is unavailable' in Outlook 2007

I am trying to install Outlook 2007 on my laptop. It has Windows Vista on it. After that I want to connect it to the SBS 2003 Server. I am having all configuration details with me and the connectivity looks to be proper. But when I am trying to connect for the first time I am getting a error on the screen saying that The connection to Microsoft Exchange is unavailable. Outlook must be online or connected to complete this action. So this is a bit annoying and I am not able to connect to the server.

I am facing the same kind of problem on XP. It is now around two weeks but yet I am not able to figure out why the error appeared. It can be related to some kind of compatibility bug. When I try to connect with a older edition of Outlook it works well. There is no error at all. It looks the SBS has some problem with 2007 edition. You can try to connect with older edition and see whether it works fine or not. I am sure there will be a alternative way to deal with the problem.