There have been numerous posts where Outlook 2007, with SBS 2008, keeps prompting for passwords. The following link suggests the problem is due to server updates, and installing Exchange rollup 9 resolves the issue. Perhaps your situation is similar. Details on the posters issue can be found on the previous page of the thread.
http://www.petri.co.il/forums/showthread.php?t=42566&page=2