If you are certain that you are using the unique id from the account settings page (this is not the same as your usual login for the site) and you have eliminated the possibility that there is a proxy server on your network then the next most likely cause is that you have a personal firewall product that is blocking the application from reaching the internet.
Make sure you are using your Toodledo Unique ID which you can find under Account Settings. I am not sure, but I would guess using OpenID could be a problem. I know with the iPhone app, you must set up a Toodledo login name to sync.
Also, Toodledo has asked that Outlook sync tool questions be moved to the Third Party Applications forum, so please post any further questions there.
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