When connecting over these slow links (dial-up connections) and launching Outlook, my users are prompted for domain credentials. The problem does not occur if users are connected using high-speed connections or if disabledomaincreds is set to value 1 in the registry. Is there another way, other than disabling domaincreds, to force Outlook to use local credentials instead of prompting for domain ones?
With the work that I do with my clients, I have to log onto a variety of forests/domains, and I use a variety of VPN clients to do so. My experience as been that, unless I configure my Outlook 2003 profiles to prompt me to log on, Outlook will only try to use the credentials I am currently logged on with (local). So it does surprise me that you are having this problem.
You can configure the User Authentication option "Always prompt for user logon name and password" in the Security tab of the Microsoft Exchange Server properties in your Outlook 2003 profiles. Now, where my scenario differs from yours is that I do not cache domain credentials, and I only log on with a local account.
What you did not mention is if your Outlook 2003 clients were configured to run in cache mode. Cache mode has a profound affect on how Outlook 2003 behaves. It was specifically designed for the type of situation you have, and if you do not have it enabled, it would be worth checking it out, as that could be a contributor to this problem. However, I'm going to assume that you do have it enabled, as that is the default setting in Outlook 2003.
Another issue that might be causing logon problems is Outlook 2003's dependence on RPC communications. RPC communications, in general, do not perform well over low bandwidth connections like dial-up. Outlook 2003 cache mode should resolve a number of these issues. To troubleshoot RPC issues use the Microsoft Knowledge Base article How to troubleshoot connectivity issues that are caused by RPC client protocol registry entries.
A couple of bugs that might be related to your problem are:
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