said by NetFixer :
You might try using the server fmailhost.isp.att.net, SSL, port 465 instead of outbound.att.net to see if that helps.
That fixed my wife's email on her MB Pro.
I have been trying to fix it for weeks.
Edit: I was using outbound.att.net successfully on my MBAir and it went south this afternoon. Changed my settings to fmailhost.isp.att.net and now all is well. Thanks again.