"Operation Failed" is a very generic message. Lets start by doing this...
1) Close Microsoft Outlook and make sure that it isn't running via task
manager
2) Delete the file that contains your send/receive settings. (Note: This
file does not contain your e-mail account setup. It only contains whatever
options you set in regards to send/receive groups) This file is stored
under your user profile with an .SRS file extension. (e.g. on my system, it
is at \documents and settings\<USERID>\application data\microsoft\outlook.
Remember that you need to reconfigure Windows Explorer to show you all
hidden/system files/folders because application data is a hidden folder.)
Once you delete the .SRS file, start Outlook and re-define whatever
send/receive settings you had. Does Outlook do what you want at this point?