My company just upgraded their email exchange server to Outlook 2007 and since then i am not able to add my work email account to my mail account on the iphone. I have a jailbroken and unlocked iphone 2g that i use on tmobile service. it has 3.0 OS and the firmaware is 04.05.04_G. I was able to get email before the Outlook exchange 2007 came in. The tech guys at the company tried everything but it didnt work so they suggested that the firmaware I am using may not be compatible with outlook exchange 2007 so I might need to upgrade my firmware.
This is actually something that was changed in iPhoneOS 3.0. If the email admin set up Exchange to require a secure connection then iPhone 2G/3G will respect that and not be able to connect as they do not have the necessary hardware/software to support the encryption.