Not only do you need to register the POP address in the mail options page, you are restricted to all lower case letters. If you use "FirstLast@MyDomain.com" for example, it will fail, but "firstlast@mydomain.com" will work.
This change seems to be fromt he same morons who about a year ago or so decided that your logon userid had to be specified in all lower case letters or your could not log on.
that may be the case , but the uid was never case sensitive.. and when Ido this for a customer I always use lower case... but I will take your word for it... I will tell you this though the sentiment around our shop is we wish ATT will get out of the email business all together and only supply the pipe and let the user bring thier own email free or hosted much like AOL lets you bring your own broadband