MS Outlook 2010 on laptop running Vista repeatedly asking for credentials

I'm running newly installed MS Office 2010 on an HP laptop running Vista. Every other program has functioned just fine and I have had no problems. Outlook, however, just will not set up my account.
I have a long-standing account that is run out of Outlook in web browsers mostly, and Outlook 2007 on my desktop PC works just fine. It completed the auto-setup with my login ID the first time and I have had no trouble since.
When I attempt to setup my account on Outlook 2010 (and I have attempted about 8 times now) I get the same strange error every time:
I start the setup wizard, it asks for my email address, name, and password. I input these things, it searches online for the server, then it pops up a window asking for my username (my email address is already filled into this spot) and my password. I put in the password and click "OK" and the window disappears as if it's working, only to reappear about five seconds later as if nothing happened. I input the password again, same result. This window does not go away and does not seem to register that I have put anything in. If I click "cancel," it tries to set it up with unencrypted settings, but that does not work either. I have tried replacing my email address in the "username" slot with the exact phrase I use to login ( "domain/username" rather than "user@school.edu ") but that gave the same result, the window simply reappeared in a few seconds.
This is extremely frustrating. Can anyone offer some insight?

 

That's the problem: there is no error message, it just won't go past the username/password step. I put in the username and password, the screen disappears, then pops back up and asks for username/password again, and again, and again.

***UPDATE***
Out of desperation, I tried "configure settings manually" and apparently input something wrong that confused Outlook so badly that it's now totally non-functional. It crashed and when I restarted it, rather than opening to the "setup an account" screen, I get this message:
"The connection to Microsoft Exchange is unavailable. Outlook must be online or connected to complete this action. "
When I click, "ok," it opens another window asking for a Microsoft Exchange server and mailbox. If I try to close or exit this box by clicking Cancel, OK, or even the X, I get this message:
"Cannot open your default e-mail folders. The file C:\Users\[very long file name].ost is not an Outlook data file (.ost)." And then Outlook closes without allowing me to try to fix this.

 

Is your user@school.edu account an Internet E-mail or a Microsoft Exchange?
Basically does you server reside in your business somewhere and host the company web site and use Microsoft Exchange Server for mail or do you use a Hosting Company to Host your website and use their Internet E-mail.

-Gringoyle