Outlook 2003 cannot resolve mailbox name

[Basel]

I'm setting up a new computer (XP Pro) and get the
following error message when i try to setup outlook 2003
with an exchange server account;

"The action could not be completed. The connection to the
Microsoft Exchange Server is unavailable. Outlook must be
online or connected to complete this action."

I'm using A VPN connection which work fine. I'm also able
to resove the name on my old computer which is using
Windows 2000 / Outlook 2000.

Any Ideas why it won't work with Outlook 2003 / XP PRO?

Thanks,
Basel