I just got the same message. My email account is with Verizon, I use Entourage on my desktop. As far as I know, Verizon has not changed their settings recently. I rechecked my settings anyway (similar to what is described above with the POP and SMPT servers) and everything was indeed correct. The only thing I noticed was that "Override default POP port" was not selected with a check-mark. I selected it, clicked OK, but I still couldn't send out an email. I rebooted Entourage. That POP setting reverted back to unselected. I was then able to send emails again...
Yesterday, suddenly I was unable to send/receive email. Once again, I selected "Override default POP port". I was then able to send/receive email. I'm thinking this must be a Verizon thing, not an incorrect user setting. I didn't see any notifications on my Verizon account page, so maybe they're not aware of it.