Secure password authentication in outlook express uses Windows NTLM/Kerberos auth.
Is in not simple SSL/TLS.
Do not enable it on linux unless you have GSSAPI/Kerberos configured.
Error 0x800CCC18 => http://support.microsoft.com/kb/202061
Reason is simple, you can not use secured login on unsecured connection.
Turn off "Log on using secure password authentication"
and change port settings accordingly to use POP over SSL (POPS = 995)
You must have dovecot configured to use SSL/TLS.
More info about standard mail service ports here :
http://www.emailaddressmanager.com/tips/mail-servers.html
Note that SSL/TLS enabled service can not be tested with telnet, you must use openssl.
More info here :
http://blog.yimingliu.com/2009/01/23/testing-a-pop3-server-via-telnet-or-openssl/
or here: