If you have a hard time setting up Office 365 for Outlook 2010 or 2007, please follow these instructions:
1- make sure you have the latest outlook updates/service pack
The version number of Office 2010 SP1 is greater than or equal to 14.0.6029.
2- IF NOT, you can download it :
Service Pack 2 for Microsoft Office 2010 (KB2687455) 32-Bit Edition
Service Pack 2 for Microsoft Office 2010 (KB2687455) 64-Bit Edition
Then Try to setup it Automatically,
3- IF, it did not connect Again, download :
Office 365 Desktop Setup Tool for Office 2010 and Office 2007
and try to configure it with Office 365 Desktop setup tools.
4- IF, It did not Configure with that tools, You need to Configure Outlook Manually:
Step 1: Open the Control Panel.
Step 2:Click Mail.
*Note: If you do not see the Mail option, change your View by setting to Large Icons or Small Icons.
Step 3: Click E-mail Accounts.Step 4: Click on New
Step 5: Select Manual setup or additional server types, then click Next.
Step 6: Select Microsoft Exchange Server / compatible service, then click Next.
Step 7: Enter the following in the corresponding fields:
Server: outlook.office365.com
User Name: email@domainname.com ( Example: john@smith.com )
then, click More Settings ...
*Note: Do not click the Check Name button at this step, or the configuration process will fail.
Step 8: Click the Security tab.
Uncheck "Encrypt data between Microsoft Outlook and Microsoft Exchange".
Choose Anonymous Authentication from the Logon network security drop-down menu.
Step 9: In the Connection tab,
Check Connect to Microsoft Exchange using HTTP, then click Exchange Proxy Settings...
Step 10: In the Use this URL to connect to my proxy server for Exchange field, enter outlook.office365.com