Look: Server says 'localhost': you are using some sort of anti-virus program which is scanning your POP3 mail before Outlook receives it. For some reason, your anti-virus is not functioning correctly. So fix your anti-virus: it is not a mailer problem and not an NTL problem.
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Thats my spampal set to clear out all the junk I get on a daily basis!!! As i mentioned in my post earlier, have changed the port to 110 and all is now fine