Hi Neil, I too am experiencing this behavior, accept it does not matter if the users are CRM Admin or not, I cannot add any more users to the org. We have a number of other organizations in this deployment and they work fine. We have 15 users currently set up for Outlook and they are working as expected, when setting up the last account I came across this, all can access via IE.
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Forum Post: RE: User must be assigned System Administrator role before Outlook client will connect
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