NIS 2010 will not let Outlook 2002 send email to Hotmail

When I have the scan outgoing mail selection checked Outlook can't send mail to my Hotmail account.  However, when I disabole outgoing mail scanning  and restart Outlook the mail will send.  Is there any fix for that and if not is there anyway to get the icon in the system tray to indicate a "green checkmark" again?

  

I am running XP sp2

 

Thanks.