I was able to find a solution buried deep in a post after 12 hours of searching.
The last few days have been a nightmare of complaints. This month's update definately broke a perfectly working SBS 2008/Exchange 2007/Outlook 2007 authentication system, both over RPC and regular. Just keeps asking for password! Tried a million things just like the others, no joy. Went into IIS Manager, opened SBS Web Applications, Select Autodiscover, double click SSL settings (you have to scroll down to see it), check Accept instead of ignore or require, and Apply. I repeated for owa, remote, Rpc, RpcWithCert (possibly don't have to do all these). Restarted Web Publishing and Joy Joy Joy!!!
