Did you add a outlook data file/personal folders (.pst file) to your outlook profile? If you did you might have accidentally password enabled it and that is why it is asking for a password. You can just right click on personal folders (within your folder list) go to properties --> advanced --> change password and zero it out. Also are you using outlook in a domain with exchange?
I hope you find this post helpful.
Regards,
Iggy
MCSE, MCSA:Messaging, A+, Network +