From MS article: http://office.microsoft.com/en-us/outlook/HP010030591033.aspx
This feature requires you to be using a Microsoft Exchange Server 2003 e-mail account. If you do not know what version of Exchange server your e-mail account is using, contact your Exchange administrator. If your computer and server do not meet the complete requirements for this feature, these options will not be available.
These steps are for connecting Microsoft Outlook to your Exchange server without using a virtual private network (VPN) (virtual private network (VPN): Extension of a private network encompassing encapsulated, encrypted, and authenticated links across shared or public networks. VPN connections provide remote access and connections to private networks over the Internet.) or other security hardware to connect behind your organization's firewall. Your Exchange administrator must enable this feature first before you can use it.
1. On the Tools menu, click E-mail accounts, select View or change existing e-mail accounts, click Next, select the Exchange e-mail account, and then click Change.
2. Click More Settings, then click the Connection tab.
3. Under Exchange over the Internet, select Connect to my Exchange mailbox using HTTP.
To specify a proxy server, click Exchange proxy settings.
Note If you use Basic Password Authentication or Password Authentication (NTLM) and an LM Compatibility Level less than 2, you will be prompted for a password each time a connection is made to the Exchange server. For more information on the LM Compatibility Level registry setting, see the Microsoft Knowledge Base for article number 147706. With Basic Password Authentication, the password is sent in clear text. For increased security, it is recommended that you use Password Authentication (NTLM), Connect with SSL only, and Mutually authenticate the session when connecting with SSL. In order to use mutual authentication, you must also specify the principal name of the server.
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