A lot of people had problems with the original version of this update http://support.microsoft.com/kb/2412171 It seemed that the best option was to uninstall it.
From the cached version of http://blogs.office.com/b/microsoft-outlook/archive/2011/01/13/fixes-for-issues-with-december-update-for-outlook-2007-have-been-released.aspx
janegilring
15 Jan 2011 11:23 AM
Ive experienced problems with Autodiscover when setting up new Outlook-profiles after installing this update. Instead of pre-populating the E-mail address field with the user s primary SMTP-address, the user`s UPN was used. This of course caused Autodiscover to fail since the UPN was not an alias on the mailboxes.
After uninstalling the latest Outlook 2007 update the issue was resolved, and the primary SMTP-address was pre-populated.
I`ve also experienced the issue with Outlook 2010, removing the latest hotfix package resolved the issue.
The affected updates:
Description of the Outlook 2010 hotfix package: December 14, 2010
support.microsoft.com/.../2459115
Description of the Office Outlook 2007 update: January 11, 2011
support.microsoft.com/.../2412171
The Outlook 2007 update are released to Windows Update/WSUS, while the Outlook 2010 hotfix package must be requested afaik.
Is this a known issue, and is it due to be fixed in upcoming updates?
To Uninstall:
How to uninstall this update Click
Start, and then click Run. Type
appwiz.cpl, and then click OK. Use one
of the following procedures, depending
on the operating system that you are
running: Windows 7 and Windows Vista
Click View installed updates. In the
list of updates, locate and click
update 2412171, and then click
Uninstall. Windows XP Click to select
the Show updates check box. In the
list of updates, locate and click
update 2412171, and then click Remove.
The problem is Outlook is preferring the autodiscover information it is finding in Active Directory via SCP and SRV records.
You can enter a few registry values to change that behavior. This registry file is for Office 2010 but if you change the version number it will also work with older version.
Windows Registry Editor Version 5.00
[HKEY_CURRENT_USER\Software\Microsoft\Office\14.0\Outlook\AutoDiscover]
"ExcludeSrvRecord"=dword:00000001
"ExcludeScpLookup"=dword:00000001
"ExcludeSrvLookup"=dword:00000001
This link describes the problem in more detail: http://support.microsoft.com/kb/956955
Best Answer
Your options are limited on a Hosted Exchange.
Having said that, you can test your Exchange Autodiscover services externally using ExRCA tool from Microsoft.
https://www.testexchangeconnectivity.com/
hth