Outlook 2007 keeps prompting users for password

After migration from Exchange 2003 to Exchange 2010 outlook 2007 keeps prompting users for password:

Symptoms

After migration of Exchange 2003 to Exchange 2010, some outlook 2007 client users keeps getting prompted to enter their credentials once again.

Cause

The problem might be related to the authentication method used on Outlook Anywhere. (Basic Authentication). (due to password being not saved in windows authentication mode.).

Resolution:

Changing the authentication method of Outlook anywhere to NTLM will resolve the issue.