http://lists.andrew.cmu.edu/pipermail/cyrus-sasl/2008-May/001388.html
This looks to be relevant .. OL2007 sends usern...@emaildomain.com as the username rather than usern...@windows-domain.com. In our setup, the email domain is not the same as the Windows domain name (domainname.com versus ad.domainname.com) so I guess that's why it fails for us, but probably works for other people.. gdh